Apple R&D spending flat for the first time in over a decade, sort of

Research and development spending has increased consistently for over a decade at Apple, but it's basically flat year over year for Q1 2024.

Apple spends incredible amounts of money on research and development each quarter. According to Apple's Q1 2024 earnings report, it spent $7.7 billion in the space.

When viewed each quarter, Apple has increased its spending on R&D year-over-year every quarter since at least 2013. For Q1 2024, it was nearly flat for the first time.

The near-flat year-over-year percent equates to about a negative 0.2% change. Typically, this would indicate a slowdown of Apple's R&D spending, but that may not technically be true.

Q1 2024 is a 13-week quarter, while Q1 2023 was a 14-week quarter. Assuming Apple spent R&D money at the same rate for another week in 2024, it would have seen a YoY increase of 7.5%.

Quarterly Apple R&D cost

A 7.5% increase would align with Apple's previous two quarters of YoY changes. Q4 2023 saw an 8.1% change, while Q3 2023 saw a 9.5% change.

However, the 13-week is what we're dealing with in reality, so that negative 0.2% change shows quite the deceleration in spending.

Line graph showing year-on-year percentage change in quarterly R&D costs with fluctuations and a final downward trend.

YoY percentage change in quarterly R&D costs

Apple's R&D spending has been decelerating but technically climbing higher than ever year over year. Evidence of Apple's constant research appears in weekly patent filings and new products like the Apple Vision Pro.

5 Comments

InspiredCode 405 comments · 8 Years

About 9 months ago

Considering all the other tech companies significantly increased R&D with Covid and then laid all those people off after Covid, I think Apple is doing just fine with no real cutbacks in R&D ever.

Also 8 billion dollars in R&D per quarter is not small by any measure.

rax_mark 37 comments · New User

InspiredCode said:

Considering all the other tech companies significantly increased R&D with Covid and then laid all those people off after Covid, I think Apple is doing just fine with no real cutbacks in R&D ever.

Also 8 billion dollars in R&D per quarter is not small by any measure.

But it isn't as if those companies didn't get return on those investments. When it comes to R&D, it's as important as marketing.

imat 215 comments · 17 Years

I alway wonder what does "R&D" mean. What it contains... And I would love to know how and for which projects Apple spends 8 Billion USDs EACH QUARTER. I imagine all of the CPU team's work is filed under R&D. But is the iOS and MacOS team as well? Honestly, just curious. An amazing amount of money.

gatorguy 24609 comments · 13 Years

InspiredCode said:

Considering all the other tech companies significantly increased R&D with Covid and then laid all those people off after Covid, I think Apple is doing just fine with no real cutbacks in R&D ever.

The quarterly results from a couple of other big techs announced this week and last isn't showing the R&D cutbacks you're claiming, at least the ones I've looked at. If anything the research and associated costs have expanded.

By the way, pre-PIP's are sometimes substituted for layoffs to avoid negative press. Nothing illegal about it, but it is another way to accomplish much of what a lay-off would: Reduce head-count.

danox 3393 comments · 11 Years

imat said:

I alway wonder what does "R&D" mean. What it contains... And I would love to know how and for which projects Apple spends 8 Billion USDs EACH QUARTER. I imagine all of the CPU team's work is filed under R&D. But is the iOS and MacOS team as well? Honestly, just curious. An amazing amount of money.

Over the years most of the so-analysts have said Apple is in trouble because they don't spend as much as their competition on R&D, however over the last 25 years Apple certainly have been more effective in how they spend their money when compared to Microsoft, Google, and Meta who all have wasted vast sums of money on giant acquisitions which in most cases don't come close to living up to expectations. (Apples largest acquisition to date three billion dollars for Beats)

Microsoft's recent acquisition of game company Blizzard for 69 billion dollars will just fade away into the breeze in time most of the programing/art-work/animation talent is hired on short term contracts in the gaming industry so most of money spend bought a facade.

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