Roger Fingas
Apple spent just 3.5 percent — $8.1 billion — of its 2015 revenues on research and development, proportionately far less than peers like Google and Facebook in the American tech landscape.
Qualcomm and Facebook spent 22 and 21 percent on R&D in their 2015 fiscal years, according to Bloomberg. Even Alphabet — Google's parent company — spent 15 percent, targeting not just Web and mobile endeavors but projects like self-driving vehicles and extending human life.
Apple did reap far more revenue than those other companies, pulling in over $233 billion, whereas even Alphabet only took in $66 billion.
Apple stretches its budget by relying heavily on advances from suppliers, said Ram Mudambi, a business school professor at Temple University in Philadelphia. The value of the company's contracts is said to encourage suppliers to put forward their own best technology.
The company's 2015 R&D budget was up from $6 billion in 2014, and $4.5 billion in 2013. Some of this presumably went into technologies like the Apple Watch and its A9-series chips, along with projects that are still extremely clandestine — including its long-term electric car project.
Apple separately spent another $11.2 billion on capital equipment expenses, such as manufacturing tools and its new Cupertino headquarters. That number is expected to reach $15 billion in 2016. It may indeed go much higher as Apple's car approaches an anticipated 2019/2020 launch.
Charles Martin
Amber Neely
Sponsored Content
AppleInsider Staff
Malcolm Owen
Oliver Haslam
31 Comments
Nah. Apple spends a lot of money on R&D - much more than Facebook, about the same as Google. It is just that Apple makes more money than any of its competitors.
Wow. First time I ever saw this site turn an Apple positive into a negative. It's usually the other way around - criticizing competitors whenever there's any perceived Apple advantage.
Apple's overall percentage may be lower, but $8 billion is still a hell of a lot of money - larger than the gross revenues of most companies.
And the number itself doesn't really matter anyway - it's how efficiently it's used, whether it's being devoted to the "right" projects and what percentage of the research eventually winds up in a practical product.
Also keep in mind Apple seems to have a pretty narrow focus on what they want R&D for. A series processors for sure, screens all come from LG and Samsung and a few others, so they're not going to double up on R&D for screens when they don't already have the facilities to make them. (Any unique R&D would get swiped by the Asian manufacturers anyway.) They say they developed the taptic engine. How much money do you think it took to research and develop the new butterfly key? Realistically it's a great innovation but I doubt it cost nearly as much as some other things do. I think Apple spends as much as it's R&D department could hope for. They're just not burning money for no reason.
Most of Apple's Revenues are "spent" on profits and on share buy backs. A more interesting metric would be what percent of its non sales staff is involved in R&D?
The cost of not having to "catch up" all the time...