Apple's R&D spending skyrockets 40% in fiscal 2012, still 2% of sales

Apple's R&D spending skyrockets 40% in fiscal 2012, still 2% of sales
Apple is notorious for making very focused Research&Development decisions, which keeps this part of its costs times less than the competition like Google or Microsoft.

Yet with one of the largest upgrade cycles it has had so far, its fiscal year 2012 saw R&D investments surge 39% to $3.4 billion, compared to 2011. For that billion more, Apple launched am iPhone design overhaul, and entered the small tablet game, not to mention the Mac line refresh, as well as the numerous other projects that might be in the labs at Cupertino.

The sum still pales in comparison with what Microsoft spent, about $9.8 billion, or Google's for 2011 at $5.2 billion, yet Apple's R&D expenses as percentage of sales stayed the same at just 2%, indicating a pretty good return on investment from those efforts. 

Of note are Nokia's R&D layouts, too - the company spent $7.3 billion, or 14.5% of its sales last year, in the push to restructure and change direction at the company. We'd call it money well spent, too, not for the bottomline, but for the technologies that brought us the Lumia 920 and 808 PureView, which are pushing the smartphone camera boundaries big time.

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29 Comments

1. Aeires unregistered

How much of that went towards the Mini and figuring out how to make a 4" iPhone screen?

3. TheLibertine

Posts: 484; Member since: Jan 15, 2012

Your irony is very appropriate here, lets hope 2013 will bring some really fresh fruit.

5. Topcat488

Posts: 1415; Member since: Sep 29, 2012

It's a good thing that Apple is spending on R&D again, because i'm thinking about getting that iphone 5S this summer... So don't be so hard on them my Android brothers. Waiting on the Note 3 also. Three cheers for Apple... HIP, HIP, HORRAY.

12. remixfa

Posts: 14605; Member since: Dec 19, 2008

nothing like buying the same phone that they already have. the 5s will be nothing but a minor spec bump and a new feature.... maybe google maps will be the new feature lol

16. Aeires unregistered

Ultimately the iPhone doesn't have to make a single hardware change for the next three years. If they gradually revamp iOS, that's big enough of a change for people to keep buying it (providing they don't isolate users like W8 is).

14. JeffdaBeat unregistered

Let's not forget Apple also has the iMac, MacBook Pro, MacBook Air, Apple TV, and iPod lineup as well. We may focus on their phones and tabs, but they do have other things to spend money on too...The new Macs look great this year.

17. Aeires unregistered

Haven't forgotten. One is a new product (sorta), and the other has lived with the same screen size for 5 years. The Mac and iPod series have lived with variety for a long time, so that's not as big of a product shake up as the iPhone is.

24. JeffdaBeat unregistered

R&D isn't just about coming up with new products. That money also goes into improving or advancing older products. I imagine the new MacBook Pros w/ Retina Display took a lot of R&D money as well as the iPod redesigns. Not to mention iMessage working for all Apple products. It's not just "Product Shake Up" money.

27. Aeires unregistered

I know, what you described was more of the Development side. I never said there weren't products that didn't get updated, just some were bigger changes than others.

29. someones4

Posts: 627; Member since: Sep 16, 2012

R&D? Or bribe for the USTPO?

2. JeffdaBeat unregistered

The one thing I look forward to is that R&D being a bit more focused with each team working more closely with each other. iOS 7 needs a major overhaul. Almost like the 3.5" screen, I don't think Apple can afford another year of the same OS design. Can't wait to see what Jony comes up with. OSX is something I'd actually prefer to stay the same, but I imagine the look of it will be changed a bit. What I do wonder is what we will se how of the new iPad and iPhone. I've always said that we are getting to the point where specs don't matter all that much...we know that iOS doesn't take that much power to run. But will they change the look and feel of the iPad or sink money into changing iOS instead. At any rate, it should be an interesting year for Apple...

4. TheLibertine

Posts: 484; Member since: Jan 15, 2012

I like your comments, quite reasonable and interesting points you always pick out.

9. jmoita2

Posts: 930; Member since: Dec 23, 2011

2% of sales? With what they charge for their products, I'm surprised it's that high...

6. xtremesv

Posts: 299; Member since: Oct 21, 2011

Apple needs R&D badly. Those days when Apple"R&D" was limited to buy innovative startups or visit distinguished companies and get ideas from their development departments, are gone.

7. hung2900

Posts: 966; Member since: Mar 02, 2012

Compared to more than $40 billion of SS, it's so nothing

20. Hemlocke unregistered

Compared to the thousands of products they make, Apple's lineup is also nothing. Apple spends appropriately for the size of their lineup. Consider that their entire hardware lineup will fit on one standard 4"x8" table. Yes, it is only 2%, but their sales are unlike anyone else's, as are their profits. For such a small, concentrated lineup, they spend a ton of money.

8. MeoCao unregistered

Apple's R&D is vastly different from other companies: It is like scouting job to find oppotunities of easy steals. Remember how they stole Sony's idea for iPhone design? This does not require much investment does it?

30. quakan

Posts: 1418; Member since: Mar 02, 2011

Look at you re-hashing false information. Project purple came BEFORE the Sony design for the billionth time.

10. InspectorGadget80 unregistered

How are they even spending that much money in their R&D research when their wasting money in the court rooms? Plus I don't see them anything innovating their making except copying GOOGLES GLASS with their crappy ipatch

11. remixfa

Posts: 14605; Member since: Dec 19, 2008

maybe they are adding their court costs into their R&D bill. I dont see how it could be so high either. lol You could design an ipad mini in 10 mins. Its the same boring design using 2 yr old parts. Not like they came up with anything new. The i5 just got a 0.5 inch sctretch.. nothing new there.. imma guess that they are using it in their Mac line or TV line.. lol

13. Reluctant_Human

Posts: 913; Member since: Jun 28, 2012

If they spent a little less on marketing and put it to R&D or legal for bogus law suits maybe they would have products worth the price tags they put on them

15. DFranch

Posts: 533; Member since: Apr 20, 2012

I'm sure their R&D expenditure pales in comparison to how much they spent on legal fees for BS lawsuits.

19. gallitoking

Posts: 4721; Member since: May 17, 2011

iOS7 better be groundbreaking... I trust you Apple. don't let me down..

21. remixfa

Posts: 14605; Member since: Dec 19, 2008

ground breaking its gonna be just like iOS6, but with WORKING iMaps. lol

25. gallitoking

Posts: 4721; Member since: May 17, 2011

wow you can predict the future. tell me what is instore for Android.. because the Nexus is going backwards?

28. DaNTRoN

Posts: 135; Member since: Jul 23, 2012

Just reading through comments and was wondering, how is nexus going backward? I hope you don't say LTE. It better than pretty much any phone on the market and half their costs. And the tablet is well spec'ed as well and priced on low side. Both are better than their predecessors. Unlike a few apple products. The official name of the new iPad is, iPad with retina display. Take into consideration that the "new" iPad had retina display and the new iPad is newer than the "new" iPad. Plus, I would take an iPod touch or iPad with retina display, hell, even the "new" iPad over the mini

23. PapaSmurf

Posts: 10457; Member since: May 14, 2012

They already have with that buggy iOS 6 and scratch magnet iPhone 5.

26. gallitoking

Posts: 4721; Member since: May 17, 2011

iOS buggy? is weird coming from a Android user.. funny

22. rusticguy

Posts: 2828; Member since: Aug 11, 2012

Filing for Patent is counted towards R&D?

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