Apple sinking more money into R&D as spending rose $1B in 2012
In Apple's 10-K filing with the SEC, it was revealed that the company increased spending on research an development by almost $1 billion, representing a nearly 40 percent increase from one year ago.
Apple on Wednesday outlined the significant bump in its SEC filing, noting that it had increased research and development spending by 39 percent, or $953 million, during the 2012 fiscal year to hit $3.4 billion.
The nearly $1 billion boost in R&D compares to growth of $600,000 during fiscal 2011 and $500,000 in fiscal 2010.
The massive increase in spending is likely the result of a multitude of new Apple products unveiled throughout the year. Most notable among the new devices, and perhaps most costly to rollout, are the iPhone 5 with its new A6 processor, the 13- and 15-inch MacBook Pro with Retina display (< a href="http://appleinsider.com/articles/12/10/30/review-apples-13-inch-macbook-pro-with-retina-display/page/5/">1, 2), the iPad mini and the totally redesigned iMac. Apple's iPod line, Mac mini and 9.7-inch iPad also received iterative refreshes.
From Apple's filing:
Overall, Apple's capital expenditures for 2012 came out to $10.3 billion, with retail accounting for $856 million, while $9.5 billion went to "other" expenses including product tooling and manufacturing. For the upcoming fiscal year, the company said it anticipates spending to drop to $10 billion.
Apple on Wednesday outlined the significant bump in its SEC filing, noting that it had increased research and development spending by 39 percent, or $953 million, during the 2012 fiscal year to hit $3.4 billion.
The nearly $1 billion boost in R&D compares to growth of $600,000 during fiscal 2011 and $500,000 in fiscal 2010.
The massive increase in spending is likely the result of a multitude of new Apple products unveiled throughout the year. Most notable among the new devices, and perhaps most costly to rollout, are the iPhone 5 with its new A6 processor, the 13- and 15-inch MacBook Pro with Retina display (< a href="http://appleinsider.com/articles/12/10/30/review-apples-13-inch-macbook-pro-with-retina-display/page/5/">1, 2), the iPad mini and the totally redesigned iMac. Apple's iPod line, Mac mini and 9.7-inch iPad also received iterative refreshes.
From Apple's filing:
While Apple has incrementally increased its R&D investments over the past three fiscal years, the spending continues to represent only a small portion of overall expenditures and an even smaller percentage of net sales. For example, in 2010 R&D represented only 3 percent of net sales, while 2011 and 2012 saw a decrease to 2 percent.[Apple] continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and enhanced products that are central to the Company?s core business strategy. As such, [Apple] expects to make further investments in R&D to remain competitive.
Overall, Apple's capital expenditures for 2012 came out to $10.3 billion, with retail accounting for $856 million, while $9.5 billion went to "other" expenses including product tooling and manufacturing. For the upcoming fiscal year, the company said it anticipates spending to drop to $10 billion.
Comments
"I wanna get me some of that, yeah . . ."
I wonder whether Apple is working towards a fully automated production chain?
Apple should spend more money on R&D. 2% is too small. It should be minimum 5%.
Originally Posted by MiddleGuy
Apple should spend more money on R&D. 2% is too small. It should be minimum 5%.
Which you know, of course, since you…
What, exactly?
"The growth in R&D expense was driven by an increase in headcount and related expenses to support expanded R&D activities."
It's about time they paid their people more. Everybody in Silicon Valley knows Apple salaries are not that competitive for the amount of work you do.
Originally Posted by Suddenly Newton
But "Apple never invented anything" /s
"Wow, why does a company that exists only because of marketing spend any money on "research" or "development"? I guess it's research into new sales lies and development of new false advertising techniques."
Originally Posted by Russell
…Apple salaries are not that competitive for the amount of work you do.
Putting a dent in the universe should be its own reward.
Quote:
Originally Posted by Tallest Skil
Putting a dent in the universe should be its own reward.
Yeah right. Tell that to Bob Mansfield. Oh, and why don't you apply for a job there and tell them you'll do it for less than anybody else.
Shouldn't the tile read
"Samsung, Asus, HP, etc. R&D sees a boost as Apple sinking more money into R&D as spending rose $1B in 2012"
I don't disagree that more could be better but to make such a specific claim should be backed up with a detailed explanation as to how you derived that figure.
Only if they convert Foxconn workers to Cybermen.
http://upload.wikimedia.org/wikipedia/en/5/59/Cyberman_-_Army_of_Ghosts_episode_(2006).jpg
(Huddler not allowing me to post a photo from my phone)
Quote:
Originally Posted by Tallest Skil
Which you know, of course, since you…
What, exactly?
Intel spent 17% R&D spending, Qualcomm 21%, AMD 22%, TI 13%, Toshiba 16%, TSMC 8%, Samsung 8%,......... and Apple 2%. It's lame.
Why, because thy can? Those employees also have te choice to work for another company. If they can get more money from everybody else in Silicon Valley and that is their sole thing they look for in a company then they should seek employment elsewhere.
I know I'd take a substantial pay cut to work at Apple's upcoming HQ onpared to the same work for MS, Nokia, RiM, Samsung, Sony, Acer, HP, Dell, Asus, et al. I et many hear would to because there are many other actors that make a job fulfilling than your salary.
Apple never throws money at a problem, and they seem to making great decisions for the past 5 years, so...
Sounds like Apple is going to be bringing out some game changing SoC's in the future.
Quote:
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.
Actually 2% is brilliant if you consider the amount of innovative devices coming out of cupertino.
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.
The increase in R&D may be influenced by legacy, continuing, and probably growing R&D spending at recent acquisitions C3 Technologies (mapping, 8/11), Anobit (flash memory, 12/11), Chomp (search, 2/12), and AuthenTec (security, 7/12). These are all areas that Apple is highly motivated to invest in.
I would not ascribe it to R&D for manufacturing processes, although R&D to create a nice bevel takes SOME work, I guess. But most of that R&D will likely be born by the machine tool manufacturer. Apple says "we want to do such and so" and the machine tool guys say "great! We'll look into it."
Here's a clue: Apple is not Intel. Apple is not AMD. Apple is not Qualcomm.
Microprocessor manufacturing is extremely expensive. Designing a new case is not. Furthermore, there's the matter of efficiency. Apple is extremely efficient with their R&D expenditures. At some point, spending more money is wasted - as you end up with duplicated effort and waste.
In the end, the only thing that matters is results. Apple has something like 10% of the mobile phone business and the entire industry is scrambling to copy them. Apple completely reinvented the personal music player business. Apple completely reinvented the mobile phone business. Apple completely reinvented the tablet business. Apple reinvented the ultralight computer business. Apple is in the process of reinventing casual gaming. So Apple's R&D expenditures appear to be more than adequate.
Ultimately, Apple is in an infinitely better position to determine how much money they should spend on R&D than you are. Calling their expenditures lame when they've reinvented so many industries is merely evidence that you don't know what you're talking about and/or you are mindlessly attacking Apple without any evidence to back you up.