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Apple's R&D expenses surge 33%, on pace to top $4 billion this year

post #1 of 63
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Apple's research and development related expenses have grown by 33 percent this year and are on pace to top $4 billion in fiscal 2013, as the company toils away on new "surprises" in its top-secret labs.

R&D


Apple spent an additional $278 million on research and development expenses in the recently concluded March quarter, the company revealed this week in a filing with the U.S. Securities and Exchange Commission, as discovered by AppleInsider. Compared to the same period in 2012, it's an increase of 33 percent.

R&D spending for the first six months of Apple's fiscal year 2013 is now up $530 million year over year, which is also a 33 percent increase from the first six months of fiscal 2012. At that pace, spending will grow by more than $1 billion this year alone.

In the SEC filing, Apple said the new expenses were "due to an increase in headcount and related expenses to support expanded R&D activities." It characterized such expenses as "critical to its future growth," and signaled that further investments in research and development will continue.

At its current pace, Apple should easily surpass $4 billion total in research and development expenses this fiscal year. In comparison, Apple spent a total of $3.4 billion on R&D in fiscal 2012.

Apple's R&D expenses have continued to swell in the last few years. Last year alone, Apple's total R&D investment rose by 39 percent, or $953 million.

While R&D spending is growing at a noteworthy clip, the money spent is still a fraction of what Apple collects in cash and investments. Apple's cash pile swelled to nearly $145 billion last quarter, which has prompted the company to spend $100 billion through the end of calendar 2015 on share repurchases and dividend payouts.

R&D


Of course, it's the development of new products that boosts Apple's bottom line, which is why outsiders have become so curious as to what the company might be working on. Since the unveiling of the iPad mini last October, Apple has not held a keynote presentation to launch a major new product.

While new iPhones, iPads and Macs are expected to debut by this fall, speculation has been rampant that Apple is working on devices that could enter the company into new product categories where it does not currently compete. Rumored products include a low-cost iPhone that could be sold affordably without a contract subsidy, a full-fledged television set, and even a wearable smart wrist watch.

Apple Chief Executive Tim Cook fueled speculation when he said during his company's quarterly earnings conference call on Tuesday that there are "a lot more surprises in the works" at Apple. He also said that Apple was looking at offering devices in new product categories, as well as new services, in comments that were unusually candid for the normally tight-lipped operation.
post #2 of 63
I believe I've mentioned this more than once.
post #3 of 63
That money must be going into a black hole because every analyst seems to say Apple has nothing planned for the future. ... Idiots.
post #4 of 63
Wow they spend as much on R&D as some countries GDP.

Amazing considering where they were in the mid 90's

Just Amazing.....
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post #5 of 63
Quote:
Originally Posted by DGNR8 View Post

Wow they spend as much on R&D as some countries GDP.

Amazing considering where they were in the mid 90's

Just Amazing.....

Their R&D budget this year is nearing their market cap when Jobs took over. So is the revenue of their "break even" iTunes Store.

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post #6 of 63
Quote:
Originally Posted by AppleInsider View Post

Apple's research and development related expenses have grown by 33 percent this year and are on pace to top $4 billion in fiscal 2013, as the company toils away on new "surprises" in its top-secret labs.


The Samsungs of the world thank you Apple for letting them avoid paying for their own R&D.

post #7 of 63
Quote:
Originally Posted by sflocal View Post


The Samsungs of the world thank you Apple for letting them avoid paying for their own R&D.

don't forget the courts that continue to allow the likes of samsung, google, et al, to benefit from apple's r & d.

post #8 of 63
Ah, but don't [insert company names here] spend more R&D as a percent of revenue or whatever than Apple does? I mean that's what we hear every day from Wall Street.
post #9 of 63
Quote:
Originally Posted by DGNR8 View Post

Wow they spend as much on R&D as some countries GDP.

Amazing considering where they were in the mid 90's

Just Amazing.....

You have to get to the real doldrums of tiny countries before you find one that has $4bn of GDP. Not really worth the comparison.

 

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

 

Mostly island nations, city states, or impoverished African nations.

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post #10 of 63

Apple spends more on R&D than Google's profit.

post #11 of 63
Quote:
Originally Posted by Rogifan View Post

Ah, but don't [insert company names here] spend more R&D as a percent of revenue or whatever than Apple does? I mean that's what we hear every day from Wall Street.


So true!!  We all know that $4 billion dollars is actually less than a $100 million dollars that others spend... /s

post #12 of 63
Quote:
Since the unveiling of the iPad mini last October, Apple has not held a keynote presentation to launch a major new product.

 

Of course it hasn't. That was only 6 months ago! It is extremely unreasonable for anyone to expect major new product launches twice a year!

post #13 of 63
I've always wondered this: does "R&D" (research and DEVELOPMENT) include all the software development costs? Or is it only the more abstract/skunkworks sorts of projects?
post #14 of 63
Quote:
Originally Posted by Rogifan View Post

Ah, but don't [insert company names here] spend more R&D as a percent of revenue or whatever than Apple does? I mean that's what we hear every day from Wall Street.


Google, Microsoft, Samsung, Intel, Nokia spend much more than Apple (not just as %).

post #15 of 63
Quote:
Originally Posted by Plagen View Post

Apple spends more on R&D than Google's profit.


No it doesn't! Google annual profit is over $12b i.e. more than Apple's annual R&D

post #16 of 63
Quote:
Originally Posted by arch View Post


Google, Microsoft, Samsung, Intel, Nokia spend much more than Apple (not just as %).

 

Google's R&D budget is basically used for acquisitions of other smaller companies - I don't think there's been another company that buys up more companies since Microsoft in the 90's.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #17 of 63
Good, hope we see Ive's fruits soon.
post #18 of 63
Quote:
Originally Posted by malax View Post

I've always wondered this: does "R&D" (research and DEVELOPMENT) include all the software development costs? Or is it only the more abstract/skunkworks sorts of projects?

 

No, not the same thing. While there may research being done in software, general software development is not part of R&D. R&D's role is to research new methods/technologies and develop them for use in whatever product you might be working on.

Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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Disclaimer: The things I say are merely my own personal opinion and may or may not be based on facts. At certain points in any discussion, sarcasm may ensue.
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post #19 of 63
Quote:
Originally Posted by malax View Post

I've always wondered this: does "R&D" (research and DEVELOPMENT) include all the software development costs? Or is it only the more abstract/skunkworks sorts of projects?

 

Quote:
Originally Posted by mjtomlin View Post

 

No, not the same thing. While there may research being done in software, general software development is not part of R&D. R&D's role is to research new methods/technologies and develop them for use in whatever product you might be working on.


It includes all software development, at least for financial reporting purposes.

post #20 of 63
Quote:
Originally Posted by Rogifan View Post

Ah, but don't [insert company names here] spend more R&D as a percent of revenue or whatever than Apple does? I mean that's what we hear every day from Wall Street.
That's tooltalk who brings that up. Although after I tore his ridiculous comparison apart last time (with Samsung) I doubt he'll bother bringing up how much Samsung spends.

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post #21 of 63
Quote:
Originally Posted by arch View Post


Google, Microsoft, Samsung, Intel, Nokia spend much more than Apple (not just as %).

And that's proof of how stupid they are.

 

There's 0 innovation from those sides, only small experiments. Apple is the one that outmuscles industries and pushes their way forward.

post #22 of 63
post #23 of 63

Microsoft spent $9 billion and the end result is Windows 8/Metro?
 

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post #24 of 63
Quote:
Originally Posted by jd_in_sb View Post

Microsoft spent $9 billion and the end result is Windows 8/Metro?

 

There has to be a serious comment to that... I am just laughing too hard to think of one.
Edited by digitalclips - 4/24/13 at 2:45pm
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post #25 of 63
Because we all know its about how much you spend. Spending more $$ = more/better innovation. Clearly if Apple was as smart as Microsoft and spent $9B instead of $4 their stock would be $1000! /s
post #26 of 63
Quote:
Originally Posted by arch View Post


Google, Microsoft, Samsung, Intel, Nokia spend much more than Apple (not just as %).

Yup and they all make less profit than Apple. Just goes to show you that spending money doesn't guarantee results. Besides copy machines and spies are getting expensive.
post #27 of 63
Quote:
Originally Posted by Crowley View Post

You have to get to the real doldrums of tiny countries before you find one that has $4bn of GDP. Not really worth the comparison.

 

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

 

Mostly island nations, city states, or impoverished African nations.

Not to pick nits, but the original poster didn't specify any particular cut-off point for the size of the country, just that the company is spending more than the GDP of some of them. Still impressive, either way.

post #28 of 63
Quote:
Originally Posted by sflocal View Post


The Samsungs of the world thank you Apple for letting them avoid paying for their own R&D.

 

And if Samsung hadn't literally spent double last year on R&D what Apple is bragging about spending this year, your clever quip might mean something.

post #29 of 63

Comparing Apple's RD budget to others is very wrong. Heck, comparing amongst companies is very VERY skewed. How many markets are these companies in? How many products do these companies have? I mean heck, Samsung makes SHIPS. Again, products and markets of companies need to be factored in. I have no idea what MS is spending 9B on.

post #30 of 63

The point was not to find out what nations spend how much and their status in the world. 

 

The point was that the R&D Apple spends is as much as any nation with a GDP equaling 4 billion.

 

I was not trying to get into semantics but rather the jaw dropping amount spent on R&D.

 

Again I repeat ... Amazing ...

Life is not measured by the breaths you take, but the moments that take your breath away. - GC
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post #31 of 63
Last quarter Cook said that the pipeline is chock full of stuff, and now he is suggesting new stuff is coming next year. I am getting the impression that by able doing so much themselves / in house, they are creating a lot of extra work for themselves that costs money and slows them down. Chip design, as an example. Maybe the chips they produce are superior, maybe not. They could just be recreating the wheel.
post #32 of 63
Quote:
Originally Posted by Rogifan View Post

Ah, but don't [insert company names here] spend more R&D as a percent of revenue or whatever than Apple does? I mean that's what we hear every day from Wall Street.


I think % of net would be a more interesting figure.

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post #33 of 63
Quote:
Originally Posted by Dave MacLachlan View Post

Not to pick nits, but the original poster didn't specify any particular cut-off point for the size of the country, just that the company is spending more than the GDP of some of them. Still impressive, either way.

My point is that it isn't really that impressive, given the size of the countries, and by referring to "countries"  when most people would read that as economies of global significance is a little disingenuous.  I quite possibly earn more in a day more than some people earn in a year, but that's really just reflective of how abominable some people's living conditions are that any meaningful statement about my income.

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post #34 of 63
Guys come on! It takes a lot of funding for Apple to come up with recent breakthrough innovations such as a bigger megapixel camera and a rotation lock button that's in a NEW place.
post #35 of 63
Quote:
Originally Posted by sflocal View Post


The Samsungs of the world thank you Apple for letting them avoid paying for their own R&D.

 

Literally laughed out load on this! : ) 

post #36 of 63
Quote:
Originally Posted by DGNR8 View Post

Wow they spend as much on R&D as some countries GDP.

Amazing considering where they were in the mid 90's

Just Amazing.....

 

Haha — I was *just* reading one of the "Wall Street upset with Apple 'cause yadda yadda" articles and thinking of the days when I feared my Centris 650 would be the last Mac I'd own due to Apple imploding, then again when getting my beige G3 tower... 


Edited by fastasleep - 4/24/13 at 3:00pm
post #37 of 63
Quote:
Originally Posted by Cash907 View Post

 

And if Samsung hadn't literally spent double last year on R&D what Apple is bragging about spending this year, your clever quip might mean something.

 

What Samsung calls Research and Development is actually Reverse Engineering and Copying. : ) 

post #38 of 63
Oh look, another new useless troll. Even puts Apple in his name.

Hey light bulb, you ever stop to think how many products Samsung makes before comparing their R&D spending to Apple? Laptops, desktops, dumb phones, feature phones, smartphones, tablets, music players, home stereo, TV's, digital cameras, camcorders, computer monitors, hard drives, refrigerators and other kitchen appliances (including the sink).......then we have their raw components like processors, RAM, flash and LCD panels.....then add in their telecommunications and cellular equipment. Suddenly their R&D doesn't look that impressive.

Another metric is R&D as a % of sales and trying to imply a higher figure is better. It's actually the opposite. Every R&D dollar Apple spends generated MORE revenue than their competitors. This makes Apples R&D as a % of revenue look very small, which only proves they are getting the biggest bang for the buck.

AppleWill, you sure you didn't post as tooltalk before?

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post #39 of 63
Originally Posted by 512ke View Post
Guys come on! It takes a lot of funding for Apple to come up with recent breakthrough innovations such as a bigger megapixel camera and a rotation lock button that's in a NEW place.


It's cute that you actually believe this.

 

For my definition of 'cute' in this regard, please see the hindquarters of your nearest animal.

 

Originally Posted by EricTheHalfBee View Post
AppleWill, you sure you didn't post as tooltalk before?
 

AppleWill, formerly OpticWhite, LGPrada, AppleIII, neobiani, oolong, NUEST, SuperJunior, TwoPM, KoreaFighting, SuJu, SteffenJobs, and hill6O.

 

In the last one, that's "O" as in the letter, as in "Oops, I'm a completely useless, pathetic troll who is apparently subsapient and therefore can't take a hint. Also, I try to impersonate real people."

 

I find it funny that there are human beings out there this disgustingly psychotic. I have to, otherwise I'd find it depressing.

 

But not tooltalk.


Edited by Tallest Skil - 4/24/13 at 3:37pm

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already fucked.

 

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post #40 of 63

deleted


Edited by MacRulez - 7/23/13 at 2:35pm
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