Though Apple’s services, wearables, and accessories products are still showing healthy growth, the iPhone has been its cash cow for a decade. As the smartphone market stalls and iPhone sales stagnate, Apple needs a breakthrough technological innovation the likes of which we haven’t seen much of during the Tim Cook era. And the company knows it.
So it’s not surprising that Apple spent a higher percentage of its total sales revenue in Q3 on research and development than it had in any quarter since before the launch of the iPhone. The company spent $4.26 billion on R&D in Q3, or 7.9 percent of its total sales. Overall, Apple has allotted 6.2 percent of its 2019 sales revenue to R&D, its highest percentage since 2003.
MacDailyNews Take: Apple just posted quarterly revenue of $53.8 billion. With a “B.” All without a so-called “breakthrough technological innovation,” putting the above use of the word “needs” in question. For some perspective, Apple could do pretty much nothing and generate north of $280 billion in 2020. Yes, in just 12 months, Apple will generate more revenue than Mastercard, Bank of America, Disney, AT&T, Royal Dutch Shell are each worth.
Who knows whether Apple will surprise us again with a game-changing tech product on the scale of the iPhone? But while the company continues to pour more money into R&D, its services business is slowly turning Apple into not just a device- and software-maker but also a media and entertainment giant, a financial services provider, a gaming platform, and beyond.
MacDailyNews Take: Yes, Apple Glasses, among other product development projects, require increased R&D spending.