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Apple announced its third quarter results at the end of July. What’s eye-catching here is that the R&D expenditure was found to have reached a record high of $4.2 billion.
Apple spent $4.2 billion in R&D expenses of total sales, which is 7.9% by weight. According to foreign media, it is the highest ratio since 2003, when Apple used iPod and Mac as its flagship products. It is also reported that Apple is conducting research and development at a rate that will spend more than $16 billion in 2019.
It can be said that the increase in R&D expenditures came as a result of sluggish sales such as the iPhone, which is a dollar box, declined 12% year-on-year. To this end, Apple is investing in core technologies that will support devices that have not yet been realized. However, it is spending a lot of money on technology development and research, which is not fixed.
The share of Apple’s R&D expenditure in sales has historically lagged behind its competitors. Compared to Microsoft’s 13.4% and Google’s 15.7%, 7.9% is by no means a large number. However, it is clear that Apple’s R&D expenditures are skyrocketing. Apple’s Ruth Portat, Google Chief Financial Officer (CFO), says the trend will continue in the future. He said that it will enhance the user experience to differentiate its products and services in the marketplace, and that he is continuing to increase investments to do so. This will have a strategic and long-term impact, he added.
However, in reality, it is confidential and veiled where Apple focuses on research and development. It is believed that this will be a key technology for devices that have not been realized, such as the development of an autonomous vehicle project, Project Titan, and rumored AR headset development.
One of these strategic R&D investments is the acquisition of Intel’s smartphone modem business. CEO Tim Cook makes it clear that there is a long-term strategy to own and control the key technologies for the products Apple makes.
Timcook may be choosing to continue investing in research and development of basic technologies that create new markets in the long term, rather than improving current products that contribute to short-term sales. Related information can be found here .
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