Apple’s spending on research and development of new products keeps growing. The company’s R&D spending increased by hundreds of millions in the second quarter of this year, totaling more than ever before.
But where is all this money going? Some of its R&D projected are obvious, but others the company tries to keep secret.
Apple laid out 3.7 billion in the April-June period for research and development. To see how much the company’s spending is growing, consider that, in the same quarter of last year, Apple spent 2.9 billion on R&D, and that was itself up from 2.6 billion in the same quarter of 2016. So quarterly R&D spending has gone up 42 percent in two years.
This strong upward trend has been going on for years. In the past four quarters, Apple spent 13.4 billion. In the previous 12-month period, it spent 11.1 billion. That’s a 20 percent increase year-over-year.
Apple vs. the competition
Given that sharp increase, how Apple compares to other top tech firms is a bit surprising.
Perhaps the iPhone maker’s top competitor is Google and its parent company Alphabet. That rival spent 5.1 billion in its most recent quarter on research and development. It totaled 18.6 billion in the previous 12 months.
Microsoft laid out 3.9 billion last quarter developing Windows and other applications. It spent 14.7 billion over the previous four quarters.
So while Apple is pouring a lot into R&D, it’s being outspent by its top rivals. That’s why a analyst recently criticized the company for low research and development spending.
Apple Research and Development of what?
It should surprise exactly no one that Apple is expected to release several new iPhones this fall. These will probably be followed shortly thereafter by fresh iPad models, and Apple Watch Series 4. The creation of all of these requires millions in R&D cash. And every one is more complicated than its predecessors, helping explain rising costs.
Also anticipated this fall is the long-delayed AirPower wireless charger. Adding support for powering multiple devices at once to this accessory took far longer than Apple expected, surely driving up the development cost. Hopefully, creating the new AirPods case with inductive charging was a relative bargain.
But these are just the projects Apple is openly working on. There’s the iCar, a self-driving vehicle that we know Apple has thousands of employees working on. That’s almost certainly costing millions every quarter.
Apple might also be developing a virtual reality headset. There are strong signs that the company is investigating VR alongside augmented reality. So far, Apple is doing more with AR, and its ARKit puts it ahead of the competition. Both are surely sucking up R&D dollars.
All these account for billions every quarter. As the saying goes, it takes money to make money.