From the article: "The massive increase in spending is likely the result of a multitude of new Apple products unveiled throughout the year."
I don't know at what point the spending kicked in, but it might be at least as accurate to say "The multitude of new Apple products unveiled throughout the year is likely the result of a massive increase in spending."
Meanwhile, this has been something I've long pondered (as a wholly amateur ponderer, natch) and the two main lines of thought here seem to be roughly:
Originally Posted by MiddleGuy
Apple should spend more money on R&D. 2% is too small. It should be minimum 5%.
Originally Posted by Slurpy
Yeah, because Apple should aim to hit some random percentage of their revenue, instead of spending exactly the amount of money that they need on R&D. I very much doubt they're skimping, but there's no point in simply burning more money for the hell of doing so. The amount of money spent on R&D shouldnt scale linearly with your profits, thats a little ridiculous.
There's some truth here, e.g., about "burning more money for the hell of it," but there's also an Apple-sees-all-knows-all assumption as well, i.e. that there IS an exact of money that's exactly what's needed. That all depends on a many factors and there's always more than one strategy that can work well for a company - especially one already on top its game and a clear market leader who have the luxury of exploring their options from that point, rather than one trying to make a hail Mary pass as they're fading away like RIM or Nokia.
I personally wanna see less mystique and boutique and more of Phil Schiller on the stage saying that as far as Apple's concerned it's "pedal to the metal" time with Apple kicking ass by revving their products as well and fast as they can.
Despite a certain amount of smugness endemic on these forums, there are lots of hungry competitors out there who have lots of talent and resources. And Apple, like it or not, has not replaced their visionary-in-chief with anything resembling another. Scott Forstall thought he was gonna be that guy, but if he is, it's gonna be somewhere else. Tim Cook can't supply chain the next vision if there is no vision. Ives can't execute a vision's design without one. Etc.
If Apple's gonna be the current team working in corporate harmony as a Committee, R&D is also one way to keep innovation going, at least at the iterative level, and possibly the next "insanely great" idea is going to come out of the R&D pool. Because for Apple to remain a (gigantic) growth company they have to have one. Just staying on top of the current lines will lead to a leveling off as the segments become saturated. For one thing, just like cars, new digital devices have much longer lifetimes than 20 years ago. And for another, their usefulness remains relevant much longer despite all the new features and speed added. My 8 year old iBook and iPod are both indispensable and sufficient for what I use them for, though I am planning to get a variety of new gadgets over the next two years.
Originally Posted by MiddleGuy
Intel spent 17% R&D spending, Qualcomm 21%, AMD 22%, TI 13%, Toshiba 16%, TSMC 8%, Samsung 8%,......... and Apple 2%. It's lame.
Speaking of percentages of revenue spent, also, we know MS wastes a lot, but they and IBM (who I don't think wastes a lot, and re comments below, IBM is as much a services as hardware company), I think, are around 8%. But percentages are only relevant as agreed already, if there's something useful to do with the money. And can you seriously argue there isn't more innovation that Apple could be profitably pursuing? I can't - I can see infinite horizons - and also, many ways in which Apple products - especially their software and cloud products - could be better than they are already. Viz:
Originally Posted by TokyoJimu
I hope all these recent changes mean better software quality. I have been disappointed in the increasing number of bugs in Apple software. iPhoto '11, for example, has been a non-stop disaster, and recent iTunes versions often take 30 minutes to sync my phone where it used to take less than three. I think they have been more interested in adding features than in making sure it all works. The decision to delay iTunes 11 is a good sign, as is this increase in R&D spending.
Of course I always wondered how Microsoft could have 65,000 employees and still have so many bugs.
P.S. I must say I use Siri all the time for dictation and have very few complaints, the main one being that the server just never responds way too often. But I now use Siri to dictate all my email and text messages on my phone, and to do simple search queries. iOS 6 Maps, on the other hand, are a disaster for me as a public transportation user.
For two of my own small examples, iTunes on my Mac loads very slowly and is hardly peppy at any time while iTunes for Windows on my Vista tower (yes, I use both companies' products about equally for various reasons) takes about three times as long to load as my next slowest to load program (Photoshop) and the interface remains more sluggish than any other program I run after it opens. And if Apple intended to keep the Mac Pro viable, whatever they bring out next year would have had a generation between it and the last released. And their hobby (Apple TV) may be hobbled by not being able to cut deals with the content providers, but the hardware and OS itself could have evolved further by now, e.g., to include apps if nothing else.
I know a new iTunes is imminent, and besides opening a better window on the soon near million apps, and other needed improvements, I do hope it also solves little - but highly annoying - details like showing the full names of podcasts one searches for. I can't often tell if I'm subscribing to the large or compact version of a video cast because the words are cut off and a whole series of clicks becomes necessary just to get this info. There are many UI glitches like these that have lingered in Apple's programs (and the OS) for year after year. More eyes on smaller details could go a long way to alleviate things like this.
And arguing that Siri, Maps and the new Final Cut Pro were not immature products at release that more (pre- and post-release) work on wouldn't help would be, as one poster noted (though in defending Apple's current approach), "asinine."
Finally, if Apple had (intelligently and diligently) ramped up R&D to double its current level, they would STILL have well over $100B sitting in their vaults which is currently used mainly as a cushion and a lever over the supply chain - and that would still certainly be enough for those purposes.
Originally Posted by EricTheHalfBee
So the amount of money as a % of revenue is the only thing that matters? Samsung makes a gazillion products compared to Apples focus on a few products. And chip making is inherently expensive which explains Intel , Qualcomm and AMD spending more.
Apple is also more profitable. If you run a highly efficient company you can make those R&D dollars go further. Judging based on % alone is asinine.
Originally Posted by damage976
All of those companies also make components, which they use as economies of scope. Therefore, it is more profitable to spend more on R&D, since they are selling their parts to Apple and other companies, whereas Apple is a buyer of components to make their products.
In case no one's noticed, Apple IS now hip deep into the (highly research intensive) fabless fab business of chip design - and I understand they co-innovate a lot on bringing advanced manufacturing techniques into their assemblers' (and sometimes suppliers') operations. Not to mention designing to coordinate with more mobile service providers than anyone else and working in more languages than any other company save, likely, MS and IBM. They're also working simultaneously on a larger number of SKU's than at any time since Jobs trimmed them back to a precious few in the late '90's. And are in more businesses by a fair number.
And again, iOS and Android and Win Phone 8 are targeted at different mind sets, but arguably Android's gained polish and capability at a faster rate than iOS in their last few revs (granting they had further to go), and Win 8 Phone - as part of an entirely new and lavishly funded new ecosystem tied to a brand that owns the Enterprise markets in many niches - will be a likely at least reasonable competitor. I for one am open-minded about an iPad weight tablet that would give me full Office on the go, that it I can construct a good use case for it for myself (at least after the "Service Pack 1" or 2 iterations that MS roll-outs always require). And people write off Amazon as a player at their peril - among others.
I also think Apple - as the company who first taught society to just point at and touch visual targets - is making a mistake (medium to long-term, not in 2013) if they continue to write off bringing touch capacity (as an option, not the primary method of interaction) to its notebook and desktops. Yes I hear some of you screaming "NOOOO!" but I know there's times when I use keyboard shortcuts and times when I use the trackpad or mouse - and there's certainly places in my work flow when pointing at something on the screen would save me half a second many times a day over the other two. Without having to grow massive triceps.
I also know it's early days and clumsy yet, but I am fascinated by the potential promise of a number of the new hybrid form factors over on the Win 8 side with all their folding and pivoting tablet/notebook tricks. And I have no use for that 20" whatever thing I saw on some site, but it looked cool enough that my gut tells me someone(s) will. So this aspect is not Apple-esque, but "Apple-esque" is also a concept that will have to evolve as tech progresses. Hopefully in the most elegant and best-implemented ways.
But there's no way Apple can rest on their laurels - especially in R&D - and expect, post the Great Disruptor's reign, to stay on at the front of the pack.