Neil Hughes
Apple's spending on research and development grew 35 percent to more than $6 billion in fiscal 2014, setting a new record as the company gears up for future products like the Apple Watch and beyond.
With $6.04 billion spent in fiscal 2014, Apple invested a record $1.68 billion into R&D in the September quarter alone. That was slightly higher than the previous record of $1.6 billion spent in the preceding June quarter.
Though total R&D spending grew 35 percent from the $4.48 billion Apple spent in fiscal 2013, research investments remained at 3 percent of the company's percentage of total net sales. In contrast, just 2 percent of total net sales, or $3.38 billion, was spent on research and development in fiscal 2012.
Apple's spending, revealed in its latest 10-K filing with the U.S. Securities and Exchange Commission, was primarily driven by an increase in headcount and related expenses. Apple said those expenses included share-based compensation costs, as well as machinery and equipment to support the company's expanded R&D.
"The Company continues to believe that focused investments in R&D are critical to its future growth and competition in the marketplace and are directly related to timely development of new and enhanced products that are central to the Company's core business strategy," the filing reads. "As such, the Company expects to make further investments in R&D to remain competitive."
Though Apple is usually tight-lipped about future product plans, the company did tip its hand on an entirely new product category last month, revealing the forthcoming Apple Watch. Final specifications and details on the Apple Watch remain unknown, because the wrist-worn device remains in development ahead of an early 2015 launch.
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86 Comments
Why? Weren't they doomed?
[quote name="GTR" url="/t/183091/apple-spent-record-1-7b-on-research-development-last-quarter-6b-in-fiscal-2014#post_2628483"]Why? Weren't they doomed?[/quote] They're still doomed. The rising amount of R/D spend clearly indicates a death spiral. /s
that's a tiny amount of R&D as a percentage of sales, considering that this is their innovation engine.
[quote name="schlack" url="/t/183091/apple-spent-record-1-7b-on-research-development-last-quarter-6b-in-fiscal-2014#post_2628503"]that's a tiny amount of R&D as a percentage of sales, considering that this is their innovation engine.[/quote] Agreed and focussed like a rifle. I far prefer Apple's approach than the almost crazy scatter gun approach of Google. Google seems to throw so much at the wall to see what sticks it makes me wonder if they have any actual vision aside from their core business, oh and stealing Apple's iPhone concepts of course.
I just priced online a new 5K iMac for my wife ($3K) and think it's pretty incredible that Apple as kept its pricing about the same for their top of the line machines for many years. We upgrade for the incremental speed boosts and OS compatibility, and the new machines are the best Macs we've ever owned over a span of nearly 30 years.
I consider Apple's R&D spending entirely appropriate, as I appreciate the continual improvements in performance and aesthetics. As beautiful as my current 27" display has been on this 2013 iMac, I can't wait to see the new display, and see Yosemite running on it.
The so-called "Apple Tax" is not a tax, and Apple's pricing is not only fair, it's a bit of assurance that they are continuing to improve their product offerings. This, among many other reasons, keeps me a loyal and happy Apple customer.
Steve picked a good successor, and I'm proud of Tim and his Apple team.