Apple R&D spend exceeds $3B for first time, up $410M from September

Posted:
in AAPL Investors
As per usual, Apple accelerated investments in research and development operations over its first fiscal quarter of 2018, spending more than $3.4 billion on new hires and initiatives that will keep the company competitive in a fast-paced tech market.




Apple's $3.4 billion outlay accounted for 4 percent of the company's net sales for the three-month period ending in December, according to a Securities and Exchange Commission filing. That figure represents a $410 million sequential increase, and a $536 million bump on the year.

Apple attributes the year-over-year growth to new hires and expenses related to R&D activities. As expected, the projects are not detailed, but Apple says it focuses investments on the development of "new and updated products and services that are central to the Company's core business strategy."

If the current rate holds, Apple is on track to spend well over $10 billion on its R&D commitment through 2018. The company first broke the $10 billion per year barrier in 2016, when R&D spend accounted for 5 percent of total net sales. By comparison, Apple committed 3 percent of net sales to R&D activities in both 2014 and 2015.

The increased R&D spend implies work on projects that go beyond routine product maintenance. Potential areas of research include an expansion to augmented reality innovations, currently limited to ARKit, that could spawn new hardware categories in the coming months or years.

CEO Tim Cook has expressed enthusiasm for AR technology in past interviews, and continued to tout the technology in Thursday's earnings conference call.

"I see AR as being profound. AR has the ability to amplify human performance instead of isolating humans," Cook said. "I am a huge, huge believer in AR. We put a lot of energy on AR, we're moving very fast."

Other investments include the remnants of "Project Titan," Apple's attempt to build a self-driving car platform from scratch. Refocused into smaller teams, the initiative is now thought to be developing autonomous driving technology using specialized sensor equipment and software installed on Lexus testbeds.

Alongside internal initiatives, Apple continues to invest in outside technology through mergers and acquisitions. On Thursday, CFO Luca Maestri said the company acquired 19 smaller firms over the course of 2017.

In December, Apple snapped up popular song recognition service Shazam for an undisclosed sum. Other reported purchases include AR headset startup Vrvana, wireless charging firm PowerbyProxi and "dark data" specialist Lattice Data.

More recently, developer support service Buddybuild announced it was acquired by Apple in January.
mmatz
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Comments

  • Reply 1 of 32
    sergiozsergioz Posts: 196member
    I hope Apple can come up with graphene  battery before sumsung does?
    brian greenSpamSandwich
  • Reply 2 of 32
    One day, Mac Pro shall arrive.
    cgWerks
  • Reply 3 of 32
    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    brian greenmacxpressmagman1979king editor the gratemmatz
  • Reply 4 of 32
    LatkoLatko Posts: 76member
    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    No, 1,5 Bio for staircases, ultrathin closets and invisible walls (and heated roofs in Chicago) don't leave room for that
    edited February 3
  • Reply 5 of 32
    FolioFolio Posts: 175member
    Speaking of AR, it should get a boost with latest NY Times app, promoted by article in paper yesterday [friday].  For now, only for iOS 11 no androids. And just in time for Winter Olympics. Care to whirl with a figure skater in your living room? Maybe this will bring it mainstream. I've not yet tried commercially
  • Reply 6 of 32
    k2kwk2kw Posts: 1,186member
    sergioz said:
    I hope Apple can come up with graphene  battery before sumsung does?
    Have there been any acquisitions of Battery technology like AuthenTec which lead to TouchID.  I don't recall any.   Of course I don't have the memory of DED.
    Apple will probably just buy them from Samsung or LG who seem to invest more in basic technologies for their component business. 

    You have to give Samsung credit for developing OLED technology because now the make a ton on the screens sold to Apple.   When you look at the Pixel2XL you can tell that LG isn't up to Apple standards.

    I hope Apple is working on miniaturization of LIDAR technology.  They could definitely bring down the cost of LIDAR systems and get a jump on the Self Driving market.   Right now Apple appears behind WAYMO and GM.  

  • Reply 7 of 32
    k2kwk2kw Posts: 1,186member

    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    All in 2019.   You don't expect MacPro or Mac Mini to show up the HomePod slipped to 2018.   But you have the iMacPro to tide you over.    They really need to get a new MBP out.  I would prefer to see an iPadPro that adds Mouse support and add an iosBook laptop, after adding multi-user support to iOS.

    Even more important is the HomePod just an appliance like device for music or does it come with full OS that is a new Platform for SIRI based audio apps similar to the Echo and Alexa.   Apple should be investing Billions Siri.
  • Reply 8 of 32
    FolioFolio Posts: 175member
    Apple seems to be efficient with R&D and giving AI more prominence.  I believe Amazon has a couple hundred researchers in Cambridge Massachusetts working on Alexa. And Google certainly is getting their money's worth from Deep Mind acquisition.  Should be interesting race For next generation capabilities. 

    But then in terms of intelligent assistant much of what we want is simple. Like an English butler level, instead of a pocket Einstein. The other day I asked Siri some question about cell phone history and she brought up a very good article , not Wikipedia, that I thought must have been curated. It answered my immediate needs better than a time consuming web search. I was pleasantly surprised. 
    mmatzpalomine
  • Reply 9 of 32
    MacProMacPro Posts: 17,079member
    Avieshek said:
    One day, Mac Pro shall arrive.
    I am excited about that too.  I truly wonder what it will look like.  I also wonder if Apple might look to NVidia for the new new Mac Pro as at least an option in the GPU department?
  • Reply 10 of 32
    MacProMacPro Posts: 17,079member

    k2kw said:

    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    All in 2019.   You don't expect MacPro or Mac Mini to show up the HomePod slipped to 2018.   But you have the iMacPro to tide you over.    They really need to get a new MBP out.  I would prefer to see an iPadPro that adds Mouse support and add an iosBook laptop, after adding multi-user support to iOS.

    Even more important is the HomePod just an appliance like device for music or does it come with full OS that is a new Platform for SIRI based audio apps similar to the Echo and Alexa.   Apple should be investing Billions Siri.
    I wouldn't rule out a new Mac Pro at the end of 2018 into early 2019.  Well I'm hoping at least.  My piggy bank is already stuffed and waiting and no iMac Pro will do either, I'd rather wait.  ;)
  • Reply 11 of 32
    k2kwk2kw Posts: 1,186member
    MacPro said:

    k2kw said:

    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    All in 2019.   You don't expect MacPro or Mac Mini to show up the HomePod slipped to 2018.   But you have the iMacPro to tide you over.    They really need to get a new MBP out.  I would prefer to see an iPadPro that adds Mouse support and add an iosBook laptop, after adding multi-user support to iOS.

    Even more important is the HomePod just an appliance like device for music or does it come with full OS that is a new Platform for SIRI based audio apps similar to the Echo and Alexa.   Apple should be investing Billions Siri.
    I wouldn't rule out a new Mac Pro at the end of 2018 into early 2019.  Well I'm hoping at least.  My piggy bank is already stuffed and waiting and no iMac Pro will do either, I'd rather wait.  ;)
    Reports from Apple's meeting with select Journalists/bloggers last spring seemed to indicate that Apple hadn't started designed it yet (that's why the iMacPro came this year) and that Apple would be looking to implement/incorporate new technology in the MacPro. So I guess that it will be dependent upon external timelines.   I think they would thrill many people if they went back to the Cheese Grater.   I just think that it will be hard for apple to resist the urge to try to put a too unique spin on their design.   So I expect WWDC 2019 for release.
  • Reply 12 of 32
    macxpressmacxpress Posts: 4,091member
    k2kw said:

    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    All in 2019.   You don't expect MacPro or Mac Mini to show up the HomePod slipped to 2018.   But you have the iMacPro to tide you over.    They really need to get a new MBP out.  I would prefer to see an iPadPro that adds Mouse support and add an iosBook laptop, after adding multi-user support to iOS.

    Even more important is the HomePod just an appliance like device for music or does it come with full OS that is a new Platform for SIRI based audio apps similar to the Echo and Alexa.   Apple should be investing Billions Siri.
    Why does Apple need to release a new MacBook Pro when they just did one? Is it because you don't like it? The market seems to...otherwise they wouldn't continue to be Apple's biggest seller. Do you think for a second that if they released one this year it would have USB A ports on it? HA!
    StrangeDays
  • Reply 13 of 32
    avon b7avon b7 Posts: 2,020member
    macxpress said:
    k2kw said:

    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    All in 2019.   You don't expect MacPro or Mac Mini to show up the HomePod slipped to 2018.   But you have the iMacPro to tide you over.    They really need to get a new MBP out.  I would prefer to see an iPadPro that adds Mouse support and add an iosBook laptop, after adding multi-user support to iOS.

    Even more important is the HomePod just an appliance like device for music or does it come with full OS that is a new Platform for SIRI based audio apps similar to the Echo and Alexa.   Apple should be investing Billions Siri.
    Why does Apple need to release a new MacBook Pro when they just did one? Is it because you don't like it? The market seems to...otherwise they wouldn't continue to be Apple's biggest seller. Do you think for a second that if they released one this year it would have USB A ports on it? HA!
    I think this is a question of perspective. If Apple (the computer company) were a separate company from Apple (the iPhone company), I'm pretty sure we'd see much more activity in terms of laptops and everything else computer related in the classic sense.

    Obviously, the golden goose is the iPhone so the Mac gets less love. This has been painfully obvious for years now. 

    IMO, the Mac division is underperforming and has committed a string of errors that haven't done it much good.


  • Reply 14 of 32
    macxpressmacxpress Posts: 4,091member
    avon b7 said:
    macxpress said:
    k2kw said:

    Avieshek said:
    One day, Mac Pro shall arrive.
    Closely followed by an upgradable Mac Mini... Oh, there is a squadron of pigs flying overhead right now... :)
    All in 2019.   You don't expect MacPro or Mac Mini to show up the HomePod slipped to 2018.   But you have the iMacPro to tide you over.    They really need to get a new MBP out.  I would prefer to see an iPadPro that adds Mouse support and add an iosBook laptop, after adding multi-user support to iOS.

    Even more important is the HomePod just an appliance like device for music or does it come with full OS that is a new Platform for SIRI based audio apps similar to the Echo and Alexa.   Apple should be investing Billions Siri.
    Why does Apple need to release a new MacBook Pro when they just did one? Is it because you don't like it? The market seems to...otherwise they wouldn't continue to be Apple's biggest seller. Do you think for a second that if they released one this year it would have USB A ports on it? HA!
    I think this is a question of perspective. If Apple (the computer company) were a separate company from Apple (the iPhone company), I'm pretty sure we'd see much more activity in terms of laptops and everything else computer related in the classic sense.

    Obviously, the golden goose is the iPhone so the Mac gets less love. This has been painfully obvious for years now. 

    IMO, the Mac division is underperforming and has committed a string of errors that haven't done it much good.


    I do agree that the Mac could see some more love from Apple, but its bread and butter is with iOS devices. There's a reason why Apple is no longer called Apple Computer. However, this doesn't mean that the MBP is a flop and nobody wants it and the ones that have one, hate them. This doesn't correlate to a string of errors. Perhaps MacPro did, but it was a bet, one that could have very easily been done even if the Mac platform had more attention paid to it. Think PowerMac G4 Cube, which was well before iPhone existed. 
    bb-15
  • Reply 15 of 32
    cgWerkscgWerks Posts: 957member
    AppleInsider said:
    Apple attributes the year-over-year growth to new hires and expenses related to R&D activities. As expected, the projects are not detailed, but Apple says it focuses investments on the development of "new and updated products and services that are central to the Company's core business strategy."
    And that's what you need to know... what is now central is fashion, emojis, services, and iPhones (and a bunch of poor speculations about the future). Also, apparently, Apple can't multi-task.

    macxpress said:
    Why does Apple need to release a new MacBook Pro when they just did one? Is it because you don't like it? The market seems to...otherwise they wouldn't continue to be Apple's biggest seller. Do you think for a second that if they released one this year it would have USB A ports on it? HA!
    No, it's because it needs a new keyboard that works better and doesn't have a high failure rate.

    macxpress said:
    However, this doesn't mean that the MBP is a flop and nobody wants it and the ones that have one, hate them.
    Not nobody, just way too many.
  • Reply 16 of 32
    macxpressmacxpress Posts: 4,091member
    cgWerks said:
    AppleInsider said:
    Apple attributes the year-over-year growth to new hires and expenses related to R&D activities. As expected, the projects are not detailed, but Apple says it focuses investments on the development of "new and updated products and services that are central to the Company's core business strategy."
    And that's what you need to know... what is now central is fashion, emojis, services, and iPhones (and a bunch of poor speculations about the future). Also, apparently, Apple can't multi-task.

    macxpress said:
    Why does Apple need to release a new MacBook Pro when they just did one? Is it because you don't like it? The market seems to...otherwise they wouldn't continue to be Apple's biggest seller. Do you think for a second that if they released one this year it would have USB A ports on it? HA!
    No, it's because it needs a new keyboard that works better and doesn't have a high failure rate.

    macxpress said:
    However, this doesn't mean that the MBP is a flop and nobody wants it and the ones that have one, hate them.
    Not nobody, just way too many.
    Citations needed...
    StrangeDays
  • Reply 17 of 32
    k2kw said:
    So I expect WWDC 2019 for release.
    Will anyone even give a shit by then?
  • Reply 18 of 32
    cgWerks said:
    AppleInsider said:
    Apple attributes the year-over-year growth to new hires and expenses related to R&D activities. As expected, the projects are not detailed, but Apple says it focuses investments on the development of "new and updated products and services that are central to the Company's core business strategy."
    And that's what you need to know... what is now central is fashion, emojis, services, and iPhones (and a bunch of poor speculations about the future). Also, apparently, Apple can't multi-task.
    Get-off-my-lawn nonsense. Emoji aren’t an Apple thing, they’re passed by a committee and implemented by each provider. 

    If you’d read much about how apple designs products at some point in your life you’d know it’s a small, focused team. Working on a small number of products is how they roll, and also happens to be multitasking. Multitasking doesn’t mean “But I want everything I want nooowwwww!”
    bb-15SpamSandwichRayz2016mmatzfastasleepmacxpress
  • Reply 19 of 32
    sergioz said:
    I hope Apple can come up with graphene  battery before sumsung does?
    I'd always hoped Apple would someday tackle advanced battery solutions considering how much their products depend upon batteries. With all the money Apple has they should definitely be able to invest in any promising new battery technology. I look at both Tesla and Amazon's CEOs and they're doing space vehicles as a sideline business. What's Apple's sideline business? I have no idea. Google and other tech companies are going into undersea cables to build up their infrastructure. I thought Apple was supposed to be working with Boeing for creating a satellite infrastructure. I haven't heard anything more about it. Apple doesn't seem to be doing anything on the side but maybe they're just very secretive about whatever they're doing.
  • Reply 20 of 32
    avon b7avon b7 Posts: 2,020member
    sergioz said:
    I hope Apple can come up with graphene  battery before sumsung does?
    I'd always hoped Apple would someday tackle advanced battery solutions considering how much their products depend upon batteries. With all the money Apple has they should definitely be able to invest in any promising new battery technology. I look at both Tesla and Amazon's CEOs and they're doing space vehicles as a sideline business. What's Apple's sideline business? I have no idea. Google and other tech companies are going into undersea cables to build up their infrastructure. I thought Apple was supposed to be working with Boeing for creating a satellite infrastructure. I haven't heard anything more about it. Apple doesn't seem to be doing anything on the side but maybe they're just very secretive about whatever they're doing.
    I've often thought about the satellite option for Apple but I think undersea solutions make more sense economically unless they really get into the vehicle business In a big way. The problem with undersea cables is protecting them.

    As for batteries, I agree that it represents a key technological area. I have no idea if Apple is brewing its own solution or is happy to leave it in the hands of other companies.

    Huawei made an important breakthrough in 2015 but chose to hold it back. Two weeks ago they teased it again. No one knows why. Their next flagship will arrive next month and some say it could include it. 50% charge in 5 minutes. I have no idea. It's also possible they could open it up to other companies. 
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