Apple R&D, property investments reach all-time highs in Q1

Posted:
in General Discussion edited January 2016
In detailed earnings results for the first fiscal quarter of 2016, Apple said it spent more than $2.4 billion on research and development operations, while gross property and related expenditures grew to $51.3 billion.


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


According to a regulatory filing issued to the U.S. Securities and Exchange Commission on Wednesday, Apple's R&D expenses grew to $2.4 billion in the quarter ending in December. The sum equates to 3 percent of the company's total net sales for the period, roughly in line with previous quarterly outlays.

Apple attributes continued sector growth to increased employment and related expenses like share-based compensation and material costs. With $1.9 billion spent in December 2014, year-over-year change comes out to 27 percent, below the curve set by full-year expense growth. Total R&D expenses for fiscal 2015 came in at $8.1 billion, up 34 percent from $6 billion in 2014, which itself grew 35 percent from $4.5 billion 2013.

During Tuesday's earnings conference call, CEO Tim Cook said Apple has no intention of scaling back capital commitments to new product research. The company has traditionally held R&D expenses to 3 percent of quarterly sales.

"We're continuing to invest without pause," Cook said during the call's Q&A session. "We have some great things in the pipeline and we very much believe strongly in investing through downturns such as the one that everyone's going through."

Related to R&D, land and building investments grew by almost $775 million since September. By comparison, growth was at $885 million for during the three-month period ending in June 2015 and $444 million in the period prior. Overall land and buildings expenses reached $7.7 billion in the first quarter of 2016, contributing to $22.3 billion in total net property, plants and equipment resources.

Apple is widely rumored to be conducting research into an electric vehicle dubbed "Project Titan," an ambitious undertaking expected to eat up both R&D money and property. Last year AppleInsider learned Apple was using a secret facility in Sunnyvale, Calif., as its base of operations, but the company is thought to be looking at other leased properties as Titan's team expands. Earlier this week, sources told AppleInsider that Titan was in flux as executives attempt to refocus the initiative, potentially leading to the departure of former project lead Steve Zadensky.

Comments

  • Reply 1 of 12
    steviestevie Posts: 956member
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.
  • Reply 2 of 12
    stevie said:
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.
    Maybe, but complacency kills..
    anton zuykov
  • Reply 3 of 12
    irelandireland Posts: 17,537member
    stevie said:
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.
    Apple disagrees.
    cnocbui
  • Reply 4 of 12
    calicali Posts: 3,495member
    stevie said:
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.
    Apple needs to pump some more R&D into mobile NOW, since all competitors are losing money. Let Apple be years ahead.
    canukstormanton zuykov
  • Reply 5 of 12
    stevie said:
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.
    Wrong. They need to spend MORE on R&D than other companies BECAUSE they have the best engineers. Nothing worthwhile is easily obtained. God, I hope you're not an APPL day trader with voting power. Too many of those greedy idiots could indeed spell Apple's doom. 
    edited January 2016 canukstorm
  • Reply 6 of 12
    ksecksec Posts: 1,545member
    I hope they stop leasing those places and buy them outright.
  • Reply 7 of 12
    zoetmbzoetmb Posts: 2,391member
    ksec said:
    I hope they stop leasing those places and buy them outright.
    Why?  Even companies who have owned their buildings have frequently sold them and then  leased them back.  It's all part of tax manipulation. 

    As Apple's labor demands change, they need to keep flexibility.  And don't forget that many employees who are in leased buildings in Cupertino will be moving into the spaceship or moving into the old campus and those employees will be moving into the spaceship.  


  • Reply 8 of 12
    sflocalsflocal Posts: 4,401member
    stevie said:
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.

    If you say so.  I'm holding my breath to see how much more efficient you are compared to Apple.  Go ahead... honestly.  We'll wait.
  • Reply 9 of 12
    mr. memr. me Posts: 3,219member
    stevie said:
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.
    OMG. That is not how research works.
    anton zuykovcnocbui
  • Reply 10 of 12
    Rayz2016Rayz2016 Posts: 4,556member
    stevie said:
    Apple doesn't need to spend as much on R and D as other companies because they have the best engineers in the business.

    But doesn't having the best engineers cost more because… they're the best engineers?
    anton zuykovcnocbui
  • Reply 11 of 12
    Rayz2016Rayz2016 Posts: 4,556member
    I dunno…

    It seems strange that Apple would spend money on a facility without a clear idea of what they're going to do with it. That doesn't shout 'laser-sharp focus' to me.


  • Reply 12 of 12
    Rayz2016 said:
    I dunno…

    It seems strange that Apple would spend money on a facility without a clear idea of what they're going to do with it. That doesn't shout 'laser-sharp focus' to me.


    Do you really expect a company to tell you what it does in every room in every building in every country that they use?
    There is probably a very well defined plan for use of all current buildings as well as their disposal, upgrade and the acquision of new ones that supports their business plans. I would not expect to see that plan. Why would I? If I were a competitor then seeing that plan would be gold dust from an Indurstrial Espionage POV.

    now, if apple were to purchase/lease a building and leave it empty for years then I might agree with you.
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