Apple's quarterly R&D spending soars past $2B mark for first time

Posted:
in General Discussion edited July 2015
Apple's operational expenditures on research and development activities surpassed $2 billion for the first time ever during the company's third fiscal quarter of 2015, a number equal to 4.1 percent of total net sales.


Artist rendering of Apple's upcoming R&D facility in Yokohama, Japan.


Compared to last quarter, Apple's R&D outlay for the quarter ending June jumped roughly $116 million to $2.03 billion, according to Apple's 8-K filing with the U.S. Securities and Exchange Commission. During the same time last year, spending stood at $1.6 billion, meaning money allotted to work on future products and services grew 21 percent year-over-year.

Apple, well known for its highly secretive R&D operations, first cracked the $1B spending mark in the last calendar quarter of 2012 and consistently piled on allotments quarter after quarter. The most obvious results of these asset expenditures are seen in Apple's consumer devices. For example, the company's latest Apple Watch product was in development for years before being announced to the public.

For the June quarter, spending is likely linked at least in part to impending iPhone and iPad product refreshes due out in fall. Apple is rumored to integrate Apple Watch's pressure-sensitive Force Touch screen technology into a next-generation iPhone model, though insiders claim low yield rates could affect initial launch supply.

Adding to Apple's bottom line are R&D centers strategically positioned in tech industry hot spots around the world, the latest venture being Japanese facility in Yokohama scheduled to open sometime next year. Reports say Apple is looking to draw experts in vehicle and health technology from the rich local talent pool.

Other more exotic technologies are also thought to be in the works, including a so-called "Apple Car" that counts an electric drivetrain and self-driving capabilities among its rumored feature set. AppleInsider uncovered hard evidence of a secret automotive-related initiative in an off-campus Apple complex with garages, repair facilities and more. It is unknown whether the area is tied to the supposed car project, dubbed "Titan," or Apple's mapping van initiative, itself another project that can be filed under R&D.
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Comments

  • Reply 1 of 22
    chadbagchadbag Posts: 1,096member
    The artist needs to realize that in Japan they drive on the left, like in British Commonwealth countries (most, not all of the Commonwealth)
  • Reply 2 of 22
    sessamoidsessamoid Posts: 182member
    Quote:

    Originally Posted by chadbag View Post



    The artist needs to realize that in Japan they drive on the left, like in British Commonwealth countries (most, not all of the Commonwealth)



    The cars in the rendering appear to driving on the left to me.

  • Reply 3 of 22
    chadbagchadbag Posts: 1,096member
    Quote:

    Originally Posted by sessamoid View Post

     



    The cars in the rendering appear to driving on the left to me.




    The one on the left is obviously on the right side of the road.  The other one is less clear.

  • Reply 4 of 22
    rogifanrogifan Posts: 10,669member
    What is included in this number? Would it include data centers or building out a CDN?
  • Reply 5 of 22
    chadbagchadbag Posts: 1,096member
    Quote:

    Originally Posted by Rogifan View Post



    What is included in this number? Would it include data centers or building out a CDN?



    Research and Development.

     

    Building out a CDN or building a data center does not sound like R&D to me.   I would assume no.

     

    Basic research as well as development of products.  

  • Reply 6 of 22
    davendaven Posts: 528member
    sessamoid wrote: »

    The cars in the rendering appear to driving on the left to me.

    I agree. The cars on the street on the right appear to be driving on the left. The car on the street to the left appears to be driving on the right. Strange.
  • Reply 7 of 22
    chadbagchadbag Posts: 1,096member
    Quote:

    Originally Posted by DaveN View Post





    I agree. The cars on the street on the right appear to be driving on the left. The car on the street to the left appears to be driving on the right. Strange.



    The one on the right almost looks like there are 3 lanes, and it is in the middle one.  It is strange.

  • Reply 8 of 22
    el3v3ntyel3v3nty Posts: 20member
    Quote:
    Originally Posted by sog35 View Post

     

    Apple Car

    AppleTV

     

    The next 5 years of Apple is going to crazy awesome.

     

    1. Continue to dominate the smartphone market.

    2. Continue to grow their Mac line and steal share from Microsoft

    3. See massive growth from the Watch.  In 5 years I can see 100 million watch sales a year

    4. Release Apple Car

    5. AppleTV dominating home media consumption

     

    Whoever sold their shares today will feel like an idiot when Apple is $200 in a couple of years.




    Ok, so

    1) There are way too many stocks that have a potential of giving more than 50% return in 2 years. 

    2) Apple car is ATLEAST 4-5 years away. 

     

    Its 1 thing to be a tech enthusiast, its another to be an investor IMO

  • Reply 9 of 22
    retrogustoretrogusto Posts: 724member
    Quote:

    Originally Posted by AppleInsider View Post



    Apple is rumored to integrate Apple Watch's pressure-sensitive Force Touch screen technology into a next-generation iPhone model, though insiders claim low yield rates could affect initial launch supply.

    Wow, are we already at the "low yield rates could affect initial launch supply" stage in the rumor process? It seems to come a little earlier every season.

  • Reply 10 of 22
    slurpyslurpy Posts: 5,154member
    Quote:

    Originally Posted by Retrogusto View Post

     

    Wow, are we already at the "low yield rates could affect initial launch supply" stage in the rumor process? It seems to come a little earlier every season.


     

    We're at a point where you can program a spambot to vomit out the predictions of "insiders". 

  • Reply 11 of 22
    davendaven Posts: 528member
    W
    chadbag wrote: »

    The one on the right almost looks like there are 3 lanes, and it is in the middle one.  It is strange.

    That would work. Many cities have streets where two lanes go in one direction and the third goes in the opposite direction. It could be that the street on the left is four lanes wide. In that case, the car is correctly oriented. Because you can't 'see' farther left, you don't know how many lanes are in the left street. If that is the case, all the cars are oriented correctly.
  • Reply 12 of 22
    Remember, the few amounts we know of car development put it in the 3-6 billion dollar range, over a typically four-five year cycle...and that was in the 1990's.
  • Reply 13 of 22
    Hey, starship warp drive engines don't design themselves, after all.
  • Reply 14 of 22
    welshdogwelshdog Posts: 1,692member

    It will interesting to watch the R&D numbers if Apple are indeed engaged in a car project.  At some point the dollars will have to go up a HUGE amount to cover the costs of automotive research.  The car project might even be the reason they went up this quarter.

  • Reply 15 of 22
    revenantrevenant Posts: 500member
    Quote:

    Originally Posted by chadbag View Post

     



    The one on the right almost looks like there are 3 lanes, and it is in the middle one.  It is strange.


     

    what i notice is the lack of people and street vendors.

  • Reply 16 of 22
    revenantrevenant Posts: 500member
    it is sad they apple spends billions for innovation that seems to be found in other companies products a year or two later.
  • Reply 17 of 22
    bigpicsbigpics Posts: 1,375member

    I consider the R&D uptick heartening news, but not necessarily a faster clip in any one area or per product, as explainable by Apple's expanding portfolio of products....

     

    Quote:

    Originally Posted by sog35 View Post



    See massive growth from the Watch.  In 5 years I can see 100 million watch sales a year.

     

    Not until it can be fully useful without an iPhone - unless phone sales go to something like 200M/yr. 

     

    Which, hmmm, they possibly could....  ...and a few gens down the line the watch will doubtlessly do much more on its own....  ....so my initial skepticism's tempering by each word I write. 

     

    So. All righty then... :)

  • Reply 18 of 22
    lostkiwilostkiwi Posts: 601member

    $2b sounds like a lot of R & D for one company.... but remember that Apple are the R & D suppliers for all of the 'innovative' companies that produce the Android platform handsets.. Xiaomi, Samsung, Sony etc..

    Not a lot of R & D really.

     

    There are a few people at work that have the new Sony (don't know the model... maybe Xperia or something??), anyway from a metre away you can't tell it is NOT an iPhone.  They are so similar it is ridiculous.  These same people are mostly Apple Haters and say that I am a 'Sheep' for being an Apple fan.  The irony of that is lost to some people I guess.

  • Reply 19 of 22
    Quote:

    Originally Posted by WelshDog View Post

     

    It will interesting to watch the R&D numbers if Apple are indeed engaged in a car project.  At some point the dollars will have to go up a HUGE amount to cover the costs of automotive research.  The car project might even be the reason they went up this quarter.


    I would expect Apple's R&D on a car to follow the same Tesla spent, as well as Tesla's time line before production.

     

    However, Apple is adding technology to their existing products that is harder for its competitors to rip off. I think we are going to see even more of that going forward. The idea is to be so futuristic in design that buying any other brand will be unacceptable to a larger and larger population.

     

    If a person doesn't use Apple branded products in a couple years from now, they risk being thought of as a Luddite.

  • Reply 20 of 22
    calicali Posts: 3,495member
    I would expect Apple's R&D on a car to follow the same Tesla spent, as well as Tesla's time line before production.

    However, Apple is adding technology to their existing products that is harder for its competitors to rip off. I think we are going to see even more of that going forward. The idea is to be so futuristic in design that buying any other brand will be unacceptable to a larger and larger population.

    If a person doesn't use Apple branded products in a couple years from now, they risk being thought of as a Luddite.

    An engine that uses Touch ID to start. This time like the ?Watch, the sensor also reads your pulse. Insuring a thief isn't using a false fingerprint or chopped off finger.
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