Apple R&D spending spiked $425M last quarter, reaching record $1.6B
Apple continues to invest heavily in research in development, with a 36 percent year-over-year increase seen last quarter, helping the company reach $4.36 billion in total R&D costs so far this fiscal year as new products in new categories are hotly anticipated.
Apple spent $1.6 billion on R&D in the just-concluded June quarter, the company's 8-K for filed with the U.S. Securities and Exchange Commission on Tuesday reveals. That's up $425 million from the $1.18 billion the company spent on researching new products in the same three-month span of 2013.
So far, Apple has spent $4.36 billion on R&D over the first 9 months of Apple's fiscal year 2014. That's an increase of 32 percent over the same nine-month span of fiscal 2013.
The new data shows that Apple's investment in R&D has actually been accelerating, growing faster in the June quarter than in previous quarters.
The spending comes as Apple is believed to be gearing up to enter entirely new product categories, and also to bring about major revisions to existing products. Most notably, a complete redesign of the iPhone lineup is expected to come this fall, while the company is heavily rumored to introduce an all-new "iWatch."
R&D investments made in the June quarter may not necessarily be indicative of products set for imminent release, but are a clear signal that the company is planning to continue innovating in existing and new markets stretching into the future.
AppleInsider was first to report in April that Apple had increased its R&D spending by $303 million in the March 2014 quarter. Costs for that three-month period reached $1.42 million, or about $280 million less than the June quarter.
In April, Apple Chief Executive Tim Cook cited escalating R&D investments as a key reason why his company needs to have ample cash on hand. As of the conclusion of the June quarter, Apple held $164.5 billion in cash, with $133.7 billion of that offshore.
"We'll continue to innovate by investing in research and development and capitalizing on our strengths in hardware, software and services," Cook said in April.
Apple spent $1.6 billion on R&D in the just-concluded June quarter, the company's 8-K for filed with the U.S. Securities and Exchange Commission on Tuesday reveals. That's up $425 million from the $1.18 billion the company spent on researching new products in the same three-month span of 2013.
So far, Apple has spent $4.36 billion on R&D over the first 9 months of Apple's fiscal year 2014. That's an increase of 32 percent over the same nine-month span of fiscal 2013.
The new data shows that Apple's investment in R&D has actually been accelerating, growing faster in the June quarter than in previous quarters.
The spending comes as Apple is believed to be gearing up to enter entirely new product categories, and also to bring about major revisions to existing products. Most notably, a complete redesign of the iPhone lineup is expected to come this fall, while the company is heavily rumored to introduce an all-new "iWatch."
R&D investments made in the June quarter may not necessarily be indicative of products set for imminent release, but are a clear signal that the company is planning to continue innovating in existing and new markets stretching into the future.
AppleInsider was first to report in April that Apple had increased its R&D spending by $303 million in the March 2014 quarter. Costs for that three-month period reached $1.42 million, or about $280 million less than the June quarter.
In April, Apple Chief Executive Tim Cook cited escalating R&D investments as a key reason why his company needs to have ample cash on hand. As of the conclusion of the June quarter, Apple held $164.5 billion in cash, with $133.7 billion of that offshore.
"We'll continue to innovate by investing in research and development and capitalizing on our strengths in hardware, software and services," Cook said in April.
Comments
Good! We will all be seeing the results of these efforts soon enough.
The best product lineup in 25 years!
This fall's product announcements are going to be some of the most highly anticipated ever! We should be seeing the new iPhone in about two months time! Bring it on!
iPhone 6 4.7"
iPhone 6 5.5"
iPad Air 2 9.7"
iPad Mini Retina 2 7.9"
Apple TV fourth gen
Mac Mini
iWatch
iOS 8
Yosemite
etc. etc. etc.
What the hell are they building!!!! I want it!!!!
Perhaps a little off topic, but I remember Stevo saying something to the effect of Apple redoubling R&D when the economy got bad instead of laying people off. Apple has spent so much money hiring and training its people and when the economy does rebound Apple is positioned to take full advantage.
I wish more companies thought this way. In Germany (I think I have this right) BMW for instance, can't just layoff 1,000 workers willy-nilly. They have to go to half-time, then 1/4 time and then retraining for different positions. I think this is a far better approach than just laying off people and letting the government pickup the tab, food-stamps, unemployment, etc. It often times is just poor management.
It hurts families, communities and other businesses when unemployed people stop buying stuff!
Best
WOW!
WOW!
It’s disgusting how little we spend on space.
Apple to announce the iShuttle.
I’d prefer a partnership with SpaceX. Flying a plane to space was always a silly idea.
Of course R&D is going to increase...
PimeSense - 3D imaging, mapping, recognition
Passif - Bluetooth semiconductors
Authentec - fingerprint/biometric scanner
Luxvue - LED displays
Anobit - Flash memory
Beats - Audio design
LiquidMetal - Material manufacturing
GT Advanced - Sapphire manufacturing
Health related hires - biometric sensors
GPU related hires - graphics processors
Radio related hires - antenna design, mobile baseband design
Not to mention engineering teams for battery chemistry, CPU design, industrial design, etc...
I don't care what people say about Tim Cook... He's got some huge plans for Apple.
Here's another comparison. The Burj Khalifa tower in Dubai cost approx. 1.5 Billion. Apples R&D this year so far is 4 billion. Campus 2 to cost
an estimated 5 billion. I'm not anti-apple spending by any means, just an interesting comparison as to what they're up to.
again WOW!
There's a vacumn of funds available for this area, you reckon?
I recon funds are being vacuumed away from space out of fear.
Welcome news. Apple's relative spending on R&D vs marketing, supply chain management, etc. has long been a bit of a sore point in my view of how they do business.
Not that they do too much of the latter two (nor that they haven't been spectacularly successful as a result), rather that IMO they and we could have benefited even more from more of the former - and with this relatively low R&D being a trend dating back decades.
The company (think it may have been Jobs) has responded to this in the past by pointing out the %age of revenues spent on R&D is not a good measure of useful innovation if company B is spending a higher % but in a wasteful, unfocused way.
To which I still reply, then when you spend more, Apple, ALSO spend more in an efficient, focused way.
Meanwhile, from my perch in the cheap seats, I'm still calling out for pedal to the R&D metal, where new magical products will be born....
When Apple announces iSearch Google will release their first iProduct:
iShitMyself.
It’s disgusting how little we spend on space.
NASA has other, more important priorities.
Do you remember what Obama directed them to do a few years ago? Absolutely disgusting.
http://www.telegraph.co.uk/science/space/7875584/Barack-Obama-Nasa-must-try-to-make-Muslims-feel-good.html
Seriously, I don't think you realise the gravity of the situation. The costs can be astronomical.
I can't stop laughing made my morning
I think apple could do this no prob and be better than bing anyday
Start eroding googles base squeeze them y buying blekko or duckduckgo
And make them squirm
And don't think Tim cook and team haven't put a target on that
I'd prefer apple because google now has become data nvasive
Welcom news. Apple's relative spending on R&D vs marketing, supply chain management, etc. has long been a bit of a sore point in my view of how they do business.
Not that they do too much of the latter two (nor that they haven't been spectacularly successful as a result), rather that IMO they and we could have benefited even more from more of the former - and with this relatively low R&D being a trend dating back decades.
The company (think it may have been Jobs) has responded to this in the past by pointing out the %age of revenues spent on R&D is not a good measure of useful innovation if company B is spending a higher % but in a wasteful, unfocused way.
To which I still reply, then when you spend more, Apple, ALSO spend more in an efficient, focused way.
Meanwhile, from my perch in the cheap seats, I'm still calling out for pedal to the R&D metal, where new magical products will be born....
I agree but you have to remember Apple wasn't in a position to "waste" money on R&D when, first, they were falling off a cliff, and then, second, during Steve Job's restructuring/rebuilding. It wasn't until the success of the iMac and iPod (due to heavy advertising and taking control of the supply chain) that Apple had enough room to comfortably start spending more and more on R&D. And it worked out in their favor, during the economic downturn, they were able to hire more and more engineers. Then, after the success of the iPhone, they were in a position where they could start planning to take control of their future, by acquiring companies and IP.
I think Steve's real brilliance was his ability to lay out in succession all the things that needed to occur to move to the next level of whatever vision he had for the future of the company. And it played out flawlessly.
And I think Tim Cook is extremely competent and methodical and is pushing Steve's vision further, possibly further than Steve himself would have.
Welcom news. Apple's relative spending on R&D vs marketing, supply chain management, etc. has long been a bit of a sore point in my view of how they do business.
Not that they do too much of the latter two (nor that they haven't been spectacularly successful as a result), rather that IMO they and we could have benefited even more from more of the former - and with this relatively low R&D being a trend dating back decades.
The company (think it may have been Jobs) has responded to this in the past by pointing out the %age of revenues spent on R&D is not a good measure of useful innovation if company B is spending a higher % but in a wasteful, unfocused way.
To which I still reply, then when you spend more, Apple, ALSO spend more in an efficient, focused way.
Meanwhile, from my perch in the cheap seats, I'm still calling out for pedal to the R&D metal, where new magical products will be born....
I remember when I went to work for Big Big Pharma, and the mantra for Big P Project Management (like drug projects), was "The entire purpose for project management is to eliminate all reasons to say 'YES' to this compound as a profitable drug as quickly as possible. That allows us to kill them early and focus those R&D monies on those proven to improve medicine." In essence, the goal of management is to maximize profits by minimizing R&D on 'proven losers,' and instead, figure out ways to make proven winners more profitable, by faster time to market, lower cost to manufacture, complete market awareness, longer lifespan, and greater breadth of use,
Later, hearing Steve Jobs say:
“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying ‘no’ to 1,000 things.”
—Steve Jobs on product development, from "Steve Jobs: Get Rid of the Crappy Stuff" in Forbes.
Catches the crux of Apple: Say yes to the critical few, and say no early. Do focused R&D on the things you say Yes to. Avoid doing R&D on things that don't make sense. Then spend on ruthless efficiency of delivery to the the market.
So I disagree. Don't become a Xerox PARC. Don't become an IBM. Let the millions of smart people do unfocused R&D, then either buy them out early, or 'buy-in' (like LiquidMetal* and Authentec) for exclusivity and or refining the process to fit the goals (reducing the cost of sapphire production), Where you have a problem to be solved, and theirs is the solution to use.
*LiquidMetal is still a semi questionable acquisition... Haven't seen big wins from this.