Apple R&D spend breaks $10B barrier in 2016 after $350M increase in Q4

Posted:
in General Discussion edited October 2016
Apple spent nearly $2.6 billion on research and development operations during the fourth fiscal quarter of 2016, bringing the company's yearly total to more than $10 billion for the first time ever, regulatory filings show.


Rendering of future R&D wing at Apple's Campus 2 headquarters.


Noted in a Securities and Exchange Commission filing published on Wednesday, Apple spent $2.57 billion on R&D during the three-month period ending in September, up $550 million from the same time last year. The figure represents more than 5 percent of the company's net sales for the quarter.

The quarterly outlay brings Apple's R&D commitment for 2016 to more than $10 billion, a 25 percent bump from $8.1 billion in 2015. Apple's commitment accounted for 5 percent of total net sales for the year, as compared to 3 percent in both 2014 and 2015.

As usual, Apple attributes the year-over-year growth between 2015 and 2016 to new hires and related expenses. Interestingly, the company hired only 6,000 people in 2016, suggesting a bulk of R&D monies went toward expansions of existing projects.

In an earnings conference call on Tuesday, CEO Tim Cook said Apple continues to heavily invest in R&D and acquisitions. During the fourth quarter, for example, Apple purchased four smaller companies.

Apple failed to mention where, exactly, the R&D money was applied, though rumors throughout 2016 pointed to explosive growth of an automotive initiative dubbed "Project Titan." At one point, the secret program was expected to yield a full-fledged autonomous car, though recent reports suggest executives had a change of heart after running into unforeseen obstacles. Under new project lead Bob Mansfield, Project Titan has shifted focus away from a proper car toward backbone autonomous vehicle technology.

The cost of international R&D centers likely goosed balance sheet figures, as Apple over the course of 2016 announced plans for new Chinese facilities in Shenzhen and Beijing, as well as the expected completion of a center located in Yokohama, Japan.

Beyond R&D, Apple reported total operating expenditures of $24.2 billion, or 11 percent of net sales, up 8 percent year on year. Capital expenditures reached $12.8 billion in 2016, a figure expected to swell to some $16 billion in 2017 as Apple builds out manufacturing facilities, data centers, corporate buildings and retail operations.

Comments

  • Reply 1 of 16
    boredumbboredumb Posts: 1,413member
    Ugliest spaceship ever...
  • Reply 2 of 16
    boredumb said:
    Ugliest spaceship ever...
    yes you are
    calimwhite1983iphonenick
  • Reply 3 of 16
    boredumbboredumb Posts: 1,413member
    boredumb said:
    Ugliest spaceship ever...
    yes you are
    WHY would you take that so seriously???
    aylkdasanman69
  • Reply 4 of 16
    irelandireland Posts: 17,547member
    boredumb said:
    Ugliest spaceship ever...
    Their new headquarters isn't an R&D spend. Incidentally, as an avid architecture fan I think it's possibly the world's most attractive office building. Organic, elegant, large but sleek, original, ingesting, self-contained, cohesive, identifiable and built to encourage collaboration.
    edited October 2016 fotoformatiphonenick
  • Reply 5 of 16
    brucemcbrucemc Posts: 1,519member
    Some quick math:
    - $1.9B increase in R&D spending.  6000 new hires
    - Taking high end engineers, and Silicon valley pricing into effect, the loaded (vacation, insurance, space, equipment, stock equity plans, etc...) cost could easily be $250K per hire.  So 6000 x $250k/person = $1.5B.  Add in some new equipment (for such research, prototyping, not production), and you are in the ballpark.  

    *Acquisitions aren't R&D, but paying for those resources you keep going forward is.

    So what are those new hires doing? Automotive, AR, maybe some VR, silicon, AI, security,...

    A huge number to be sure, but lower than the industry average due to Apple's high net sales.
    iphonenick
  • Reply 6 of 16
    flaneurflaneur Posts: 4,509member
    boredumb said:
    boredumb said:
    Ugliest spaceship ever...
    yes you are
    WHY would you take that so seriously???
    I'll answer you. If you want to post something like that go do it at MacRumors. This is a good positive story, and you want to start out the thread like that . . . 

    Actually, for a rectangular, that is a fantastic looking building, what with the all-glass exterior walls.

    (Edited for civility.)
    edited October 2016 mwhite1983
  • Reply 7 of 16
    sflocalsflocal Posts: 4,492member
    boredumb said:
    boredumb said:
    Ugliest spaceship ever...
    yes you are
    WHY would you take that so seriously???
    When you grow up, we'll discuss.  Until then, go troll elsewhere.
    iphonenick
  • Reply 8 of 16
    Strange that R&D, which is probably mostly secret stuff, has all-glass walls. Guess it's a given that Ive's labs are not here!!
  • Reply 9 of 16
    Should have spent some of the money on Macs; and if roumors are true not only the laptops.
    I think if destop Macs (those that are not AiO) would get a little more love at Apple they could sell a lot better.
    ewtheckman
  • Reply 10 of 16
    irelandireland Posts: 17,547member
    Strange that R&D, which is probably mostly secret stuff, has all-glass walls. Guess it's a given that Ive's labs are not here!!
    Basement floors too.
  • Reply 11 of 16
    That should bump them into the top 10 R&D spenders in the world. A pity they didn't spend more money while they were growing but if they are back on track next year as they forecast, they should keep moving in the right direction. I guess they only have a handful of products and services so don't really need to spend as much as, e.g. Samsung or the pharma companies but it would be good to see them keep pace with Google and Amazon
  • Reply 12 of 16
    Qualcomm and Momentum Dynamics are investing heavily into wireless charging systems and recently we learned Apple has patented sth in that regards. Tesla Motors has one huge flaw - not interested in wireless, hopefully many automakers will prove me right. 
  • Reply 13 of 16
    clock07 said:
    Qualcomm and Momentum Dynamics are investing heavily into wireless charging systems and recently we learned Apple has patented sth in that regards. Tesla Motors has one huge flaw - not interested in wireless, hopefully many automakers will prove me right. 
    I'd be surprised if they weren't at least working on it. There are after market wireless chargers for the model S so it wouldn't be so hard for Tesla to implement it but perhaps they don't think the technology is where it needs to be yet. It would be strange if they would work on the robo snake but not wireless
  • Reply 14 of 16
    boredumbboredumb Posts: 1,413member
    sflocal said:
    boredumb said:
    boredumb said:
    Ugliest spaceship ever...
    yes you are
    WHY would you take that so seriously???
    When you grow up, we'll discuss.  Until then, go troll elsewhere.
    Seriously, it isn't the lovely circular "spaceship", that's all I was saying.
    And it may be beautiful in its own right, opinions may vary.  
    But the resulting venom would only be an appropriate response from a petulant architect themself,
    not to a simple, silly throwaway line that was only meant to differentiate the photo here from the spaceship we are lauding elsewhere.
    So, frankly, I may not be the only one who needs to check how seriously they are taking themselves here. ;)
  • Reply 15 of 16
    1st1st Posts: 310member
    sweet! invest in the future is the way to go.  Can't wait to see the next gen gadgets.  timing is perfect, with node scaling reach to the end and starting for application ready, 3d power scaling is necessary to move forward... hopefully, will see multicore utilization more soon... (just careful hiring too many newbies... fearless is good, ruthless is not so good)
Sign In or Register to comment.