A radically different Apple looms; R&D reveals the company’s largest pivot yet is coming

“People are focusing on the wrong thing when analyzing Apple’s path forward in the face of slowing iPhone sales,” Neil Cybart writes for Above Avalon. “Instead of debating how much Apple will try to monetize the iPhone user base with services (not as much as consensus thinks), the company is instead planning its largest pivot yet. There are only a handful of logical explanations for Apple’s current R&D expense trajectory, and all of them result in a radically different Apple. In a few years, we are no longer going to refer to Apple as the iPhone company.”

“As I pointed out last May, Apple’s R&D expense saw a significant bump up beginning in mid-2014. It was clear Apple was up to something big. However, after looking at Apple’s 2Q16 results, it appears I underestimated the situation,” Cybart writes. “Apple is now on track to spend more than $10 billion on R&D in 2016, up nearly 30% from 2015 and ahead of even my aggressive estimate. This is a remarkable feat considering that Apple was spending a little over $3 billion per year on R&D just four years ago.”

“The most shocking aspect about the amount of money Apple is spending on R&D is how little attention it has garnered in Silicon Valley and on Wall Street,” Cybart writes. “Apple is telling us that they are working on something very big, and yet no one seems to notice or care. I find that intriguing.”

Much more in the full article – recommended – here.

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37 Comments

  1. “Apple is telling us that they are working on something very big, and yet no one seems to notice or care. I find that intriguing.”

    Apples R&D spend may be growing but it still lags way behind others even though it is the richest company in the world. Apple has not been a leading innovator for a long while now. There has been lots of promises and hype, but no revolutionary or class leading products. This is why people take little notice. People do care. they would love Apple to start producing class leading and defining products again but actions speak louder than words.

  2. As many others have pointed out the amount spent means nothing. In most cases it means a lot of pet projects with no real end product in sight but breakthroughs can and do happen if you have the right team, leadership and passion.

    The last I checked back in 2013 MS spent around 10.5 billion on R&D. What do they have to show for it?

    1. In the phone area (which interests people here) not much. But on Server side Microsoft has realized some quite incredible stuff:

      – Azure
      – Virtualized network infrastructure (Converged Fabric)
      – Virtualized Storage (SOFS with features that were reserved to big players like EMC / IBM / NETAPP)
      – Private/Hybrid cloud integration
      – and and and.
      This R&D money has gone in the professional segment where about which endusers most often don’t have a clue.

  3. In a few years, we are no longer going to refer to Apple as the iPhone company.

    Why would anyone refer to Apple as merely ‘the iPhone company’ unless they didn’t care about Apple or understand Apple? BFD ‘the iPhone company’! Ignorance.

    1. Next point regarding ignorance: WallNut Street has made a clichéd meme out of ‘Short term thinking; Long term disaster.’ That’s what WallNut Street does. That’s the limit of its thinking abilities. WallNut Street is inherently self-destructive in this day and age.

      Therefore, of course R&D is irrelevant to slaves of the meme. I find it hilarious that the analcysts get hemorrhoids over Apple not coming up with a new GEE WHIZ product ever quarter. And yet the same analcysts don’t give a rat’s about Apple’s investment into their own future in the form of both its savings and its R&D investments.

      ∑ = Severe retardation (mental disability) on WallNut Street. Obviously, that is a reflection of the greater cultural and intellectual decay within the USA. Witness the Donald Dumpf phenomenon. Could their be a clearly indicator of the stupefaction of the nation? No. – – And no, I’m not enamored of the alternative(s) to Dumpf either. Stupefaction.

  4. The pivot already happened. Cook is so celebrity obsessed that he has changed Apple to an entertainment company instead of a tool company. All of Apple is focussed on devices that entertain their uninvolved customers, iPhone, iPad, Watch, Music.

    Apple Computer Inc was about making tools that got out of your way so you could produce, create, and innovate -work.

    I need great Macs! With Macs I created businesses that employed scores of people, published information that changed culture, educated future adults, and created music and art.

    With iPhones and iPad I can read the news while I poop.

    1. The pivot toward celebrities and left-wing social causes is indeed, troubling for Apple.

      Steve was a free spirit thinker, yet smart enough to not allow pet causes to interfere with business.

      Uber TROUBLING, is allowing these distractions to negatively affect the business of, “it just works.”

      Pity … 😕

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