Apple's R&D spending shoots up 42% year-over-year, hit new $1.9B record in Q1
Apple does not appear to be resting on its laurels despite record sales of its iPhone and Mac, as the company spent nearly $2 billion on research and development in the first fiscal quarter of 2015, an increase of more than 40 percent over the year-ago figure.
The location of Apple's forthcoming Cambridge R&D center in the U.K.
The $1.9 billion outlay is $215 million more than Apple spent in the fourth quarter of fiscal 2014 and $565 million more than the spend in the first quarter of that year. As has become its custom, Apple's most recent 10-K attributed the increase broadly to "an increase in headcount and related expenses, including share-based compensation costs, and machinery and equipment to support expanded R&D activities."
Apple's overall R&D spend continues to lag behind many of its competitors, but the company has long espoused a "focused" strategy, rejecting the correlation between spending large sums on research and the production of innovative products.
"The Company 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," the filing reads. "As such, the Company expects to make further investments in R&D to remain competitive."
Unlike many other tech firms, Apple does not publicly reveal any information about its research activities, aside from the filing of patent applications. The R&D operation also suffers from few leaks relative to the company's supply chain, though some information has come to light in recent months.
Prime Minister Shinzo Abe revealed last month that Apple would build a "cutting-edge" research facility in Japan, though it has still not been formally announced. A second location is slated to come online in Camrbidge, U.K. and will join other known operations in Shanghai, Tel Aviv, and Cupertino.
The location of Apple's forthcoming Cambridge R&D center in the U.K.
The $1.9 billion outlay is $215 million more than Apple spent in the fourth quarter of fiscal 2014 and $565 million more than the spend in the first quarter of that year. As has become its custom, Apple's most recent 10-K attributed the increase broadly to "an increase in headcount and related expenses, including share-based compensation costs, and machinery and equipment to support expanded R&D activities."
Apple's overall R&D spend continues to lag behind many of its competitors, but the company has long espoused a "focused" strategy, rejecting the correlation between spending large sums on research and the production of innovative products.
"The Company 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," the filing reads. "As such, the Company expects to make further investments in R&D to remain competitive."
Unlike many other tech firms, Apple does not publicly reveal any information about its research activities, aside from the filing of patent applications. The R&D operation also suffers from few leaks relative to the company's supply chain, though some information has come to light in recent months.
Prime Minister Shinzo Abe revealed last month that Apple would build a "cutting-edge" research facility in Japan, though it has still not been formally announced. A second location is slated to come online in Camrbidge, U.K. and will join other known operations in Shanghai, Tel Aviv, and Cupertino.
Comments
And buy comcast so iCloud works faster. And bring us all gigabit fiber. Etc.
As long as they maintain their focused approach and don't start wasting research dollars frivolously like some other tech companies. Of course I can't see Apple heading down that road.
I'm sure they will continue to expand into some new product categories over time but I imagine a lot of their R&D dollars will be spent on improving their current products.
Hopefully they will see a breakthrough in battery technology as I can see that having the biggest impact across a wide range of their current product lineup.
That's the one I'm hoping to see major changes in the not-to-distant future.
That's the one I'm hoping to see major changes in the not-to-distant future.
Improvements in battery technology would affect 95% of Apple's hardware product line (iPhones, iPads and most Macs).
How much money is dedicated to fixing major bugs?
How much does it cost to fix search in iOS?
Spending more is not always better. Like the mythical man hours. You can only throw so much effort at something to be effective.
Steve used to say it wasn't about spending research dollars, and at the time, Apple had the lowest spending. Of course, he seemed like a tightwad.
It's nice they are spending money, but you can get lost in all of those $$$.
Often, all you need are some smart people who can see through the crap and sit in a quite place for a few hours and think of something that is real simple for a solution. Money does not create create great ideas. Really, I'm skeptical. Think of where Apple came from when they were freaking almost broke. The iMac. The iPod. The subsequent devices. The original iMac shattered everything that was out there and I bet they spent very little (of what they had left) on design and build, because they couldn't spend a lot. But Steve bet the farm, it seems, on the iMac. Their hail Mary.
Or go back further to the Apple I. Woz had a great idea and was soldering the first Apples in the offices of HP where he worked. (The garage was a myth).
Ideas are free. Laying out some path for the future does not cost much. Maybe doing some research on where to go next.
How many research dollars were spent on thinking of buying Beats? LOL.
Kudos to Apple for kicking major butt the last few years (and before), but spending more and more money? Things can get out of hand and people lose focus.
R&D spending isn't the same thing as software development. Their R&D budget has nothing to do with iOS or OS X updates.
Me too, especially if some of that better battery tech is in time (no pun intended) for the ?Watch.
I also hope Apple is ploughing money into Cloud services and possibly ?Search. If Apple could take away a chunk of users from Google (and Bing) and not monetize them, much as they are doing with ?Pay, it would strengthen the eco system, sell more Apple hardware and hurt Google and Microsoft. All good things to do.
'In Apple I trust' 8-)
By the way, it wasn't that long ago i recall Apple being critized by Wall Street for its low R&D spending compared to the 'Oh so wonderful Scamsung'.
Not quite. But I read today that Apple's $179 billion in cash and investments was equal to $10 for every man, woman and child on tne planet.
Actually, these days, the easy and obvious has mostly been done. It's the hard and not so obvious that's mostly left. The more sophisticated technology becomes, the more difficult, and epensive it becomes to advance it further. I'd love to know just what it is that you invented that gives you the eperience to say what you have..
What a lot of people forget in their rush to criticize this, is that while Apple's product expansion has been going on for a while, they still have a relatively small product line for the amount of sales. Because of rhis, they can spend more money on fewer things. I remember some time ago when Apple's R&D expenses was compared to that of Nokia, and found wanting, that I went and counted the number of phones Nokia produced. It was over 225! Plus networking products, etc. Apple had one, a few computers, some iPods, and a handful of other products. So sure, Apple's numbers were lower, but the number per product was vastly higher.
A lot of people still don't get that.