The mobile industry and the current state of innovation
A hazy preface
A report out of Booz & Co has taken up the task of mapping the top 1000 companies that spend the most on innovation in what it calls the Global Innovation 1000. The word “innovation” is a pretty elusive term nowadays – we all want it, but we often don't recognize the hurdles involved, and what it actually takes. Such hurdles, as you can guess, are mostly alleviated with money. Lots and lots of money, that companies spend on what often turn out to be dead-end projects, or simply new knowledge and tech that are occasionally way before their time and are therefore put into hibernation mode until a proper application is found. This means that an obscene amount of money is churned into R&D departments across companies with the hope that in the long-term, the investment may end up paying for itself. A parallel that may not be particularly apt, but is sure to instigate your imagination would be the idea of paying now for the latest iPhone or Samsung phone with the promise that it may or not may not reach your door 5, 10 or 20 years from now. That's actually outrageous, most of us would feel very much under the weather at the mere thought that, say the Nexus 5, will be delayed by even a month.
Random musings away, much of the mobile industry, the very reason Internet corners like PhoneArena exist, has been led by innovation for the last decade or so. Unfortunately, annoyingly persistent universal laws, like the one of diminishing returns, assert that the more we innovate, the harder it is to continue in the same stride. This, once again, means an ever increasing amount of resources, both money and human, has to be allocated to the task if any one company is hoping to keep up. For this reason, undertakings such as Global Innovation 1000 by Booz & Co are pretty essential, to put it plainly. In fact, in my humble opinion, these charts receive way too little attention from the everyday consumer, despite them being vital across industries.
What will we do without numbers?
These, of course, are just numbers, and there's an argument to be made that a dollar for one company doesn't necessarily equal the potentially more innovative dollar of another. Obviously, this is all marred in a bog of bias and perception. Speaking of which, in order to make the report complete, Booz & Co have also surveyed consumers, asking them to identify the most innovative company as they see it. Unsurprisingly, Apple is at the very top, and that's probably fair, seeing as Cupertino is also a big R&D spender with $3.4bn invested in 2013. Google, Samsung and Amazon, respectively, take up the next 3 slots, and we also have Microsoft (7th) and Facebook (10th).
Where now? What now?
A few things in the new report are strikingly on target. First off, there's simply no denying that the mobile industry is currently at the forefront on more than just innovation, but also in a social and economical sense. The former is showcased with the industry taking the biggest share of the innovation cake, while the latter is plainly obvious from the presence of 7 out of the 10 companies that we see as most innovative being engaged with the mobile industry in one way or another.
“The Importance of Being Bold”, that's how Booz & Co are concluding their report. But it's not all about taking on daring investments, rather, their studies summarize a simple fact: a major success criteria for companies has consistently been rooted in listening to your customers and what they have to say. And if one company is unwilling to, or is doing a shabby job of it, chances are that at least some of its competitors are doing the very opposite.
As Salesforce's Bill Blau puts it, “The pace of business today does not allow for years to go by. If you're not innovating now, you're going to die, quickly”.
More popular slideshows
iOS 7 release date and time are today (Sep 18), get ready to update!
18 Sep 2013, 04:00
HTC One 2 aka HTC M8 rumor round-up: camera, specs, release date and design
05 Dec 2013, 10:44
Android 4.4 KitKat update: release date, features and rumors
31 Oct 2013, 02:31
Cyber Monday 2013 deals on phones, tablets and other electronics
01 Dec 2013, 10:55
How to take better photos with your Samsung Galaxy Note 3
05 Dec 2013, 03:02
reference: Booz & Co
1. PapaSmurf (Posts: 4219; Member since: 14 May 2012)
I see Samsung and Intel in the top five. ;)
5. pokharkarsaga (Posts: 336; Member since: 23 Feb 2012)
Samsung is a giant in the tech world.
22. InspectorGadget80 (Posts: 5178; Member since: 26 Mar 2011)
Samsung leader of technology in the mobile industry.
7. Sarajevo (Posts: 37; Member since: 30 Nov 2012)
Yeah, but if you check Samsung's revenues you will realise that Samsung put only small pie in R&D. Intel is way better player here, because they spent 15% of its revenues on R&D (Sami only around 5%)...
17. squallz506 (banned) (Posts: 1075; Member since: 19 Oct 2011)
Google has increased its year to year r&d spending more than any other. Expect great things to come.
26. MobileKicker (Posts: 207; Member since: 19 Sep 2013)
Sad not to see blackberry
Happy not to see android
2. nobelset (Posts: 244; Member since: 17 Oct 2012)
Nokia spending much more than Apple. Shame, really -,-
11. Napalm_3nema (Posts: 440; Member since: 14 Jun 2013)
Nokia still makes a lot of products. Apple makes ~ 10 hardware products, and around the same number of software products. Nokia is more than just a consumer electronics company, whereas that is all that Apple is.
28. dranis6 (Posts: 8; Member since: 27 Oct 2013)
And yet quality wise Nokia still can't compete. Its funny really.
4. Beijendorf (Posts: 108; Member since: 27 Aug 2013)
Judging from the % of revenue, Samsung is rather low on the list, and Apple is just pathetic.
I'm all the more impressed with Tesla, but not completely surprised they're spending 66 % of their revenue on research and development.
As for the mobile industry, Nokia really shows why they're so innovative even without being the largest manufacturer. Spending 16 % of their revenues on RnD. Right up there among the innovative giants like Google, Microsoft and Intel.
6. Sarajevo (Posts: 37; Member since: 30 Nov 2012)
Nokia spent 3 times more money of available money than Sami, and even more than Apple. Nokia spent 6.1 bn $, Samsung 10.4 bn $, but Nokia has 6 time less revenues than Sami. And discrepance was even bigger in previous years...
8. McLTE (Posts: 590; Member since: 18 Oct 2011)
You can't look at the % of revenue spent on R&D and make conclusions about whether a company is doing a decent job or not. You have NO Idea what they are spending the money on.
Company X may be throwing billions of $$ at random ideas or technology in the hopes that one is a success, where Company Y may be much more focused and spend much less but with clear direction.
Can't really bag on Apple too much either (as much as I'd love to). It's not a fair comparison between Apple's R&D spend and Samsung. Apple is a much less diverse company, where Samsung into many different industries. A more accurate comparison between the two companies would be in the computer/phone segment.
it is interesting to me to see Tesla spend SO MUCH on R&D.. I love the whole story behind the company and that they are taking on the big auto players.. and doing very well! I hope one day to have a Tesla!
10. Beijendorf (Posts: 108; Member since: 27 Aug 2013)
"Company X may be throwing billions of $$ at random ideas or technology in the hopes that one is a success"
Yes, this is called being innovative. Figuring out new technology and new solutions. It's expensive but means occasional breakthroughs. These are the companies that should be praised for actually doing sensible things with their profits.
"Company Y may be much more focused and spend much less but with clear direction."
And that's called doing some fine-polishing on the edges of the shoulders of the giants the company is already standing on. It may be pretty, but it won't usher us into a new era of technology.
Realistically a good company does both. It's blatantly obvious which companies are mostly doing fine-polishing though.
12. Napalm_3nema (Posts: 440; Member since: 14 Jun 2013)
Yes, since only one mobile technology company seems to be capable of igniting new markets, it does seem to be pretty logical.
It's not just number of products that count, how efficient a company is also plays into it. $1 billion is the same amount of money at every company, but how much bang each company gets for that $1 billion is a different story. If a company is bloated with a lot of diverse organizations within in and separate, inefficient hierarchies, they will not get the same benefit as will a smaller, more integrated company.
16. Beijendorf (Posts: 108; Member since: 27 Aug 2013)
When it comes down to it, all companies have similar hierarchies and cash-flow efficiencies.
There is one thing to point out though: the rule of diminishing returns.
If you focus on one field of research and spend 5 billion dollars, you won't get a whole lot more if you instead decide to spend 10 billion dollars.
As such, companies that broaden their research fields (Like Google or Nokia) and spend a reasonable sum in each field, are more likely to hit milestones and breakthroughs.
For example, Nokias Advanced Technologies Division is working on both nanotechnology, graphene, software, camera technology, etc. They've produced the H264 coding standard, Low Energy Bluetooth, the imaging technologies, etc. They pretty much dwell in all current fields.
Compare that to Intel who spend a notably large sum, but focus on processors. They're market leading only because they spend so much more to get that tiny edge in one field.
9. Finalflash (Posts: 441; Member since: 23 Jul 2013)
Interesting note though, notice the disparity between public and professional perception perception. Apple isn't even in the top 20 when professionals are concerned while they are first when people are asked. This is the power of marketing right there.
18. TechBizJP08 (Posts: 474; Member since: 25 Mar 2013)
I don't know about marketing. If you ask me, almost 7 of the 10 people even with or without knowledge of tech would still choose apple. You know why?
3 words. "Word of mouth". If 1 guy tells you apple is good. Then passing info only saying buy apple products. Will definitely 100% makes this guy a zombie for apple. Look at the video on the iPhone release. These people have no idea why the chose to wait in line cold and shimmering. You know why? Because they were told that apple is good. But by far not the best....
15. clevername (Posts: 1379; Member since: 11 Jul 2008)
so out of all the companies that heavily invest in mobile, nokia spends the largest % in R&D.
23. -box- (Posts: 3470; Member since: 04 Jan 2012)
It's no wonder their products are the best in the industry.
19. Jeradiah3 (Posts: 884; Member since: 11 Feb 2010)
I said on this website a long time ago that the mobile industry has started to plateau and there were those that thought I was crazy................I knew I was right and I still stand by it. The last 3 technological advances in the mobile industry were RAM, screen size and processor speed AND eventually that'll become an issue to innovate as well. We'll always find a way to innovate an old topic to remain relevant
24. -box- (Posts: 3470; Member since: 04 Jan 2012)
Make it 4 and you have to include Nokia's camera tech
25. -box- (Posts: 3470; Member since: 04 Jan 2012)
Actually, I take that back. The three you mentioned aren't innovative, they're evolutionary iterations, as is battery capacity, thinness, weight reduction, and increased capabilities: computers blazed this trail, there's nothing really new save for them being on a mobile device.
Actual innovations would include camera sensors and software where pixels and constantly improved and newly created algorithms are being used in clever and seemingly inconceivable ways, rather than just refining optics and adding more pixels, gesture controls (although those are somewhat derivative, and not new thinking) and super-sensitive displays that can be used without heat or electrical transfer (traditional resistive and capacitive screens), and tech that combines and links computers, phones, video game consoles, and hone automation systems into a seamless ecosystem.
20. artealis (Posts: 98; Member since: 15 Dec 2010)
OMG apple spend no money for R & D ??
so why their devices so expensive and hardly change.
i understand it when we buy an android phone or windowsphone, we pay for R & D cost too.
so when iboy buy new shiny ipon, the money goes to? patent court and ads? that innovation.
21. N-fanboy (Posts: 347; Member since: 12 Jan 2013)
Impressed by nokia. But they deserve more for their hard work, so does tesla. And where is LG? I guess all they do is copy samsung.