Apple ramps up R&D spending like there’s no tomorrow

By

R&D
One of Apple's shiny R&D investment centers where it invents the future.
Photo: Apple

Apple spent more money on research and development in the past quarter than it spent in any three-month period in the company’s history. Q3 2019 R&D spending also accounted for the largest proportion of Apple revenue since 2003, back when the iPod ruled as Apple’s biggest seller.

At a time when the iPhone no longer accounts for most of Apple’s revenue, this level of investment suggests that there are some big things in the works in Cupertino.

In total, Apple spent $4.2 billion on R&D in the quarter that ended in June. This equaled 7.9% of Apple’s total revenue, putting the company on pace to spend more than $16 billion on R&D this year.

The great pipeline of Apple products

R&D spending by itself doesn’t mean anything, of course. Some of Apple’s biggest tech rivals typically outspend Cupertino. In the last quarter, Microsoft and Google both invested a greater percentage of their revenue than Apple did.

In fact, Cupertino’s approach to R&D spending seems quite similar to Apple’s strategy for buying companies. Despite its deep pockets, Apple never splashed cash on acquisitions in quite the same way as other giants. But Apple nonetheless historically showed that it can dictate the direction of the industry with its investments.

As Steve Jobs himself said, “Innovation has nothing to do with how many R&D dollars you have. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.”

There’s plenty of reason to get excited about what Apple’s R&D spend could mean, though. Apple is doing more of its own chip development in-house. It’s also investing in augmented reality and its continued Project Titan self-driving car project.

After more than a decade of the iPhone being Apple’s primary focus, it seems that things are truly starting to shift. And that’s exciting if you’re an Apple fan looking for the next insanely great product to buy!

Source: CNBC