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

Posted: , by Daniel P.

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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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posted on 02 Nov 2012, 10:24 11

1. Aeires (unregistered)

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

posted on 02 Nov 2012, 10:31 5

3. TheLibertine (Posts: 484; Member since: 15 Jan 2012)

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

posted on 02 Nov 2012, 10:32 6

5. Topcat488 (Posts: 1396; Member since: 29 Sep 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.

posted on 02 Nov 2012, 11:05 2

12. remixfa (Posts: 14605; Member since: 19 Dec 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

posted on 02 Nov 2012, 12:44

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).

posted on 02 Nov 2012, 11:18 5

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.

posted on 02 Nov 2012, 12:46

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.

posted on 02 Nov 2012, 16:49 1

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.

posted on 02 Nov 2012, 17:18

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.

posted on 02 Nov 2012, 19:06 3

29. someones4 (Posts: 625; Member since: 16 Sep 2012)

R&D? Or bribe for the USTPO?

posted on 02 Nov 2012, 10:30 6

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...

posted on 02 Nov 2012, 10:32 4

4. TheLibertine (Posts: 484; Member since: 15 Jan 2012)

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

posted on 02 Nov 2012, 10:46 2

9. jmoita2 (Posts: 930; Member since: 23 Dec 2011)

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

posted on 02 Nov 2012, 10:35 1

6. xtremesv (Posts: 298; Member since: 21 Oct 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.

posted on 02 Nov 2012, 10:39 3

7. hung2900 (Posts: 965; Member since: 02 Mar 2012)

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

posted on 02 Nov 2012, 14:34 2

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.

posted on 02 Nov 2012, 10:40 6

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?

posted on 03 Nov 2012, 11:50

30. quakan (Posts: 1398; Member since: 02 Mar 2011)

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

posted on 02 Nov 2012, 10:48 2

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

posted on 02 Nov 2012, 11:04 3

11. remixfa (Posts: 14605; Member since: 19 Dec 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

posted on 02 Nov 2012, 11:07

13. Reluctant_Human (Posts: 904; Member since: 28 Jun 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

posted on 02 Nov 2012, 11:33

15. DFranch (Posts: 254; Member since: 20 Apr 2012)

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

posted on 02 Nov 2012, 13:10

18. lyndon420 (Posts: 5002; Member since: 11 Jul 2012)

R&D? Yeah right. I call BS...apple sues everyone instead of developing a superior product.

posted on 02 Nov 2012, 13:15

19. gallitoking (Posts: 4721; Member since: 17 May 2011)

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

posted on 02 Nov 2012, 15:33

21. remixfa (Posts: 14605; Member since: 19 Dec 2008)

ground breaking

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

posted on 02 Nov 2012, 17:12

25. gallitoking (Posts: 4721; Member since: 17 May 2011)

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

posted on 02 Nov 2012, 17:40

28. DaNTRoN (Posts: 135; Member since: 23 Jul 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

posted on 02 Nov 2012, 16:34

23. PapaSmurf (Posts: 10457; Member since: 14 May 2012)

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

posted on 02 Nov 2012, 17:13

26. gallitoking (Posts: 4721; Member since: 17 May 2011)

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

posted on 02 Nov 2012, 15:35 1

22. rusticguy (Posts: 2828; Member since: 11 Aug 2012)

Filing for Patent is counted towards R&D?

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