An Apple R&D bonanza

“After a brief lull, Apple’s R&D expenditures are once again exploding higher,” Neil Cybart writes for Above Avalon. “Apple’s 2Q18 financial guidance implies the company will soon report the largest year-over-year increase in quarterly R&D expense in its history.”

“Management is on track to spend $14 billion on R&D in FY2018, nearly double the amount spent on R&D just four years ago,” Cybart writes. “The dramatic rise in Apple R&D expenditures raises questions regarding the company’s product pipeline and whether management’s overall approach to R&D is changing.”

“Apple’s pace of R&D expenditures is nothing like the company has ever seen. The $14 billion of R&D expense that Apple will spend in FY2018 will be more than the amount Apple spent on R&D from 1998 to 2011,” Cybart writes. “My theory on the dramatic rise in Apple R&D expenditures is that management is becoming more ambitious. Apple’s future is found in new industries. Just as Apple moved from desktops/laptops to personal music players, smartphones, and watches, the company will need to enter new industries to remain relevant.”

Read more in the full article here.

MacDailyNews Take: May Apple’s R&D investment bear much fruit!

25 Comments

    1. “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.”

      1. Whenever someone starts touting how much a company is spending on R&D, I am reminded of that specific quote from Steve Jobs. It is also true, as applecynic points out, the R&D can take many forms, and that IBM likely performed more foundational R&D than Apple does.

        That leads to another Steve Jobs’ quote about innovation versus creativity. Creativity is developing an idea. Innovation is implementing it – bringing it into practice so that it can be used. The world needs both creativity and innovation. Apple needs both creativity and innovation. But innovation is a crucial step that should not be undersold, because revenues and profits are made from innovation – functional products that can be manufactured and sold. All of the creativity in the world will not save a company that fails to bring at least some of those great ideas to practice.

        Steve Jobs also had a quote about saying “no” to a thousand good ideas in order to focus on a few great ideas. After thinking about it some more, I believe that quote applies to the innovation side of R&D. Steve appeared to believe in broad, creative R&D efforts. But, when it comes to changing the world, Steve realized that it only took one or a few innovative products to alter the future. He also realized that, in the absence of a strict and disciplined team focus on delivering an insanely great product, the result would be less than stellar. He also rightly believed that a spare, ascetic approach to product design would force the team to eliminate the dross, focusing the effort on the essential. After releasing the first iteration of a ground-breaking product, you can evolve it to add other features/functions. The original iPhone that was released eleven years ago (so short a time and, yet, so long ago) was both evolutionary and limited in significant ways. Subsequent upgrades to the processor, graphics, and wireless protocol, as well as the addition of third party apps and the App Store marked the second revolution and transformed the iPhone and the world.

        Results matter. Real artists ship. Don’t tell me how much Apple is spending on R&D…show me the results.

  1. Beware of overly-funded R&D; More funds often produce waste; Look at Google’s before Sergei cut back on its wayward R&D budget. And look at the very few people who worked on the iPhone.

    1. once said: “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money….”

  2. Apple has a wide open field of where they might go, even within the product range they now have. Kook at what is being done in the health field. EKG related advances within the Watch environment is really exciting and has a lot more that can be done. Diabetes? Apple is just getting started and they have strong relationships with the FDA, impressive universities and hospitals/clinics. Very exciting and that’s just Health.

    Hang on.

  3. How many billions in R&D does it take to update a Mac Mini more often than once every 5 years?

    How many billions does it take to put together a competitive streaming site for video content?

    How many billions does it take to update the Mac Pro more than once every five years?

    How much did it cost Apple in R&D to develop the Apple TV remote?

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