Apple is spending more than ever on Research and Development to fulfill the 'Steve Jobs Doctrine'

[steven36]

A new report  points out that Apple spent $4.2 billion on research and development in the quarter ending in June, the highest quarterly amount it has ever spent on research and development, according to its quarterly earnings statement.

 

 

Apple’s R&D bill came out to 7.9% of its total revenue, the highest percentage since 2003, when Apple was still focusing on iPods and Macs. Apple is on pace to spend over $16 billion on research and development in 2019.

 

The increased spending on R&D comes as Apple’s cash cow, the iPhone, has seen sales slump. iPhone revenue last quarter was down 12% from the same period last year. So Apple is investing in core technologies that may power devices that haven’t been built — but open-ended technology development and exploration comes at a cost.

 

Historically, Apple has been a laggard behind other top technology companies when it comes to spending as a percentage of its sales, and it still is. In the June quarter, Microsoft spent 13.4% of its revenue on R&D, and Google spent 15.7% of its sales on R&D.

 

Analysts have noticed Apple’s rising R&D costs. On its Q3 earnings call, an analyst asked Apple CFO Luca Maestri if the company expects to continue to spend an increasing amount on investment, and he said that the trend would continue.

 

Maestri further stated that "We want to improve the user experience and differentiate our products and services in the marketplace. So, we will continue to do that. There are some types of investments, of course, that are very strategic for us and they will have -term implications."

 

Apple CEO Tim Cook explained the Intel purchase with a phrase that’s becoming known as the "Tim Cook doctrine" among Apple observers.

 

Cook stated that "Apple has a long-term strategy of owning and controlling the primary technologies behind the products that we make. For more, read the full CNBC report. The report touches on the Intel modem acquisition, on Project Titan, on AR glasses and more.

 

For the record: It was actually a Steve Jobs doctrine that was recorded back in 2004: "I've always wanted to own and control the primary technology in everything we do." Tim Cook simply parrots that thinking.

 

 

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[PastJeff]

I wonder if this new strategy would actually improve the quality of their products and not just an excuse to jack up prices because "now everything is made with Apple quality"

[mkc21]

I hope they burn money pointlessly and fail miserably after crashing and burning (as that stupid cult should have long time ago)

[Infinite_Vision]

On 8/5/2019 at 10:05 AM, PastJeff said:

I wonder if this new strategy would actually improve the quality of their products and not just an excuse to jack up prices because "now everything is made with Apple quality"

 

I hope so too.  And I'm not a fan of Apple or any other big organizations like this.  I just want competiton so that the consumers will win in the end.  What happened to Apple is that they got too cozy with the other Silicon Valley firms.  It's what we called Group think.  When everybody start doing the same thing, everything start looking similar.  Nothing cutting edge just old reharsh and minor upgrades.  What Google did was that they kept their competitors close to the vest and then took over the whole thing.  At one point, Google was behind Apple and Microsoft, now, they're eating all of their lunches.  I've seen a picture of them having dinner with a former president in a whole table.  

 

To get back on track, in my opinion, Apple needs to break free from these guys so they can get some fresh air and get away from the group think.  Yes, there is safety in number but if you have a tiger in your camp, he is bound to eat you sooner or later.  We all know who the tiger is Apple.  There is a saying, keep your friends close but your enemies closer.  And that is true in business.