Apple R&D spending continues to grow in lockstep with iPhone, AR projects

Posted:
in AAPL Investors edited May 2
Apple spent almost $3.4 billion on research and development over the course of its second fiscal quarter of 2018, a $602 million year-over-year increase that brings the company's six-month spend on future operations to nearly $6.8 billion.

AR


Detailed in a Securities and Exchange Commission filing on Wednesday, Apple's $3.38 billion outlay accounts for 6 percent of its net sales for the three-month period ending in March. The figure is down about $29 million from its record-setting 2018 holiday quarter.

Though smaller on a sequential basis, the investment represents a significantly higher percentage of total net sales. Apple typically allots 4 percent or 5 percent to R&D -- 4 percent in quarter one -- leaving the 6 percent doled out this period on the high end of its range. The company last hit 6 percent in the third quarter of 2017, just prior to the unveiling of iPhone 8 and iPhone X.

As usual, Apple fails to detail where, exactly, the money went. Today's filing offers the same boilerplate description of ongoing development of new and updated products and services, new hires and material expenses related to R&D expansions. Apple and other tech companies routinely grow R&D expenditure as their product offerings mature, a necessary commitment for the sustainability of existing businesses.

Still, the increase in spending, as it relates to quarterly net sales, hints at work on projects that go beyond product maintenance.

Apple is widely rumored to launch a trio of new iPhone models later this year, two of which will boast OLED screens. The company is looking to capitalize on the success of its first OLED handset, the iPhone X, which has been the best-selling iPhone since its launch in November. During an earnings conference call on Tuesday, CEO Tim Cook said the March quarter was the first to see in which the most expensive iPhone was also the most popular.

Beyond iPhone, Apple is investing heavily in augmented reality. The company's efforts have so far been limited to iOS and ARKit, which recently received a few new features with the release of version 1.5 in iOS 11.3, but rumblings suggest big plans for the technology.

Apple is reportedly hard at work on an AR headset referred to internally as "T288." Little is known about the device, but a report last week claims current plans involve two 8K displays -- one for each eye -- a separate computing unit and integration with advanced communication technologies like WiGig 2.0 or 802.11ay.

The company is also moving ahead with its autonomous vehicle platform built from the remnants of "Project Titan." Currently being evaluated on California roads by what is thought to be a fleet of 45 vehicles, Apple's initiative is believed to encompass self-driving software and supporting hardware for use in third-party cars.

Other investments could include development of cutting edge health-monitoring components like a glucose sensor for Apple Watch, next-generation AirPods, a smaller HomePod speaker, branded high-end headphones and more.

Including R&D, Apple reported total operating expenses of $7.53 billion, or 12 percent of net sales.

Comments

  • Reply 1 of 18
    stewartsstewarts Posts: 3member
    And don’t forget iPads with FaceID tech!
  • Reply 2 of 18
    mike54mike54 Posts: 268member
    That why there wasn't any left to update the only reasonably priced mac they have.
    entropysbrian greenwozwoz
  • Reply 3 of 18
    please give the mac pro people at least enough dough to afford proper Workstations to design the damn thing...
    wozwoz
  • Reply 4 of 18
    nunzynunzy Posts: 662member
    Apple R and D is much more efficient than other corporation. Their outlays cannot be compared to any other.
    muthuk_vanalingamwatto_cobra
  • Reply 5 of 18
    macxpressmacxpress Posts: 4,636member
    please give the mac pro people at least enough dough to afford proper Workstations to design the damn thing...
    So you think the current Mac Pro design was held up by lack of R&D funding? HAHAHAHA! It was a bet for a direction that simply didn't pan out. When you're the leader in tech, sometimes you screwup and make a wrong turn. 

    I'm sure no matter what Apple does with the Mac Pro it will piss a bunch of people off. Everyone has their idea of what "their" Mac Pro should be. 
    Soliwatto_cobra
  • Reply 6 of 18
    macxpressmacxpress Posts: 4,636member
    mike54 said:
    That why there wasn't any left to update the only reasonably priced mac they have.
    I'm sure there isn't any lack of funding for the Mac and its most likely not the reason why you're not seeing your precious Mac come out as soon as you'd like. 
    watto_cobra
  • Reply 7 of 18
    wozwozwozwoz Posts: 209member
    If they get another $1billion in R&D, maybe they will figure out how to make a monitor. You know - the thing you plug into your Mac Pro (doh) or Mac Mini (doh).
    h2p
  • Reply 8 of 18
    gmgravytraingmgravytrain Posts: 753member
    mike54 said:
    That why there wasn't any left to update the only reasonably priced mac they have.
    It's unlikely Apple doesn't have enough money to go around. Maybe not enough skilled personnel for a project, but surely enough money. I think Apple simply isn't motivated to update desktops and notebooks like most computer companies are. Jony Ive wastes time on fancy exteriors instead of improving the internals. Considering all the motherboard manufacturers there are, I'm sure it doesn't take rocket science to build a fast and powerful desktop computer that uses industry standard components and connectors. Apple has to be wasting time on something else, like trying to stuff everything into some impractically small case. I'm not sure why Apple thinks that's what consumers want but maybe they're doing it to differentiate themselves from other computer manufacturers.

     If Apple wants to build low-powered, energy-efficient desktops for the consumer masses, that's fine, but at least offer powerful BTO models for professionals. I really don't see the point in building desktop computers with mobile GPUs. I'd think Apple is just putting itself at a disadvantage against Windows desktops running GTX 1080 GPUs as nearly standard equipment. And that thing about Apple restricting fan speed on an iMac Pro... Utterly unbelievable when most companies offer software for precise fan control for every situation. I'd want to ramp up my computer fans if it's a matter of cooling down my computer's internal components. I'd rather plug my ears with cotton, if that's the case.
    edited May 3 h2pwozwoz
  • Reply 9 of 18
    macxpressmacxpress Posts: 4,636member
    wozwoz said:
    If they get another $1billion in R&D, maybe they will figure out how to make a monitor. You know - the thing you plug into your Mac Pro (doh) or Mac Mini (doh).
    Yes because other displays don't work with Macs....
    watto_cobra
  • Reply 10 of 18
    macxpressmacxpress Posts: 4,636member

    mike54 said:
    That why there wasn't any left to update the only reasonably priced mac they have.
    It's unlikely Apple doesn't have enough money to go around. Maybe not enough skilled personnel for a project, but surely enough money. I think Apple simply isn't motivated to update desktops and notebooks like most computer companies are. Jony Ive wastes time on fancy exteriors instead of improving the internals. Considering all the motherboard manufacturers there are, I'm sure it doesn't take rocket science to build a fast and powerful desktop computer that uses industry standard components and connectors. Apple has to be wasting time on something else, like trying to stuff everything into some impractically small case. I'm not sure why Apple thinks that's what consumers want but maybe they're doing it to differentiate themselves from other computer manufacturers.

     If Apple wants to build low-powered, energy-efficient desktops for the consumer masses, that's fine, but at least offer powerful BTO models for professionals. I really don't see the point in building desktop computers with mobile GPUs. I'd think Apple is just putting itself at a disadvantage against Windows desktops running GTX 1080 GPUs as nearly standard equipment. And that thing about Apple restricting fan speed on an iMac Pro... Utterly unbelievable when most companies offer software for precise fan control for every situation. I'd want to ramp up my computer fans if it's a matter of cooling down my computer's internal components. I'd rather plug my ears with cotton, if that's the case.
    Thank you armchair engineer for your input...
    fastasleepwatto_cobra
  • Reply 11 of 18
    blastdoorblastdoor Posts: 1,884member
    Regarding automotive, here are some factoids I find interesting: 

    Tesla has a market cap of about $46 billion. 
    GM has a market cap of about $50 billion. 
    Tata has a market cap of about $16 billion. 

    you might wonder -- "who is Tata?" 

    Well, it's an Indian car company that owns several car brands including Landrover and Jaguar. 

    Check out the new all-electric Jaguar iPace: 

    https://www.jaguarusa.com/all-models/i-pace/index.html

    I don't know if Apple has any interest in buying a car company, but if they do, Tata looks like an attractive option. 
    patchythepiratewatto_cobra
  • Reply 12 of 18
    deminsddeminsd Posts: 82member
    macxpress said:
    wozwoz said:
    If they get another $1billion in R&D, maybe they will figure out how to make a monitor. You know - the thing you plug into your Mac Pro (doh) or Mac Mini (doh).
    Yes because other displays don't work with Macs....
    With your logic, why need Apple computers at all?  Windows PC's can run the same software and have better performance for less money.  My point is some people want "all-Apple".  
    muthuk_vanalingamwozwoz
  • Reply 13 of 18
    deminsddeminsd Posts: 82member
    nunzy said:
    Apple R and D is much more efficient than other corporation. Their outlays cannot be compared to any other.
    Is the new definition of " more efficient" where the more you spend and the less you produce is "more efficient"?  If so, then you're right...Apple is "more efficient".
  • Reply 14 of 18
    JinTechJinTech Posts: 320member
    wozwoz said:
    If they get another $1billion in R&D, maybe they will figure out how to make a monitor. You know - the thing you plug into your Mac Pro (doh) or Mac Mini (doh).
    Fixed that for you.
  • Reply 15 of 18
    macxpressmacxpress Posts: 4,636member
    deminsd said:
    macxpress said:
    wozwoz said:
    If they get another $1billion in R&D, maybe they will figure out how to make a monitor. You know - the thing you plug into your Mac Pro (doh) or Mac Mini (doh).
    Yes because other displays don't work with Macs....
    With your logic, why need Apple computers at all?  Windows PC's can run the same software and have better performance for less money.  My point is some people want "all-Apple".  
    Except thats always not true....and is also a massive exaggeration over what I said. 
    edited May 3 watto_cobra
  • Reply 16 of 18
    macxpressmacxpress Posts: 4,636member
    JinTech said:
    wozwoz said:
    If they get another $1billion in R&D, maybe they will figure out how to make a monitor. You know - the thing you plug into your Mac Pro (doh) or Mac Mini (doh).
    Fixed that for you.
    Should probably be Mac Pro and MacBook Pro, not Mac mini. The display costs more than the Mac mini itself...idk why someone would buy a display like that to connect to a Mac mini. 
    watto_cobra
  • Reply 17 of 18
    MacProMacPro Posts: 17,778member
    nunzy said:
    Apple R and D is much more efficient than other corporation. Their outlays cannot be compared to any other.
    True but some companies save a fortune as Apple is their R&D source. Google switching horses from a BlackBerry knock off to an Apple one as in Android post iPhone or how about Microsoft purloining the original Mac OS and then QuickTime.  Before the references to Steve and Xerox PARC start, check your facts.
    edited May 3 watto_cobra
  • Reply 18 of 18
    entropysentropys Posts: 1,374member
    macxpress said:
    mike54 said:
    That why there wasn't any left to update the only reasonably priced mac they have.
    I'm sure there isn't any lack of funding for the Mac and its most likely not the reason why you're not seeing your precious Mac come out as soon as you'd like. 
    Yes it was no doubt some internal corporate weenie battle.  With the consumer missing out and Mac sales much less than they otherwise would have been.
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