
Apple increased R&D spending by $1 billion in 2012 - iProject
http://arstechnica.com/apple/2012/11/apple-increased-rd-spending-by-1-billion-in-2012/
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beloch
Some perspective:

Apple is now spending roughly a third as much as Microsoft does on research
despite generating roughly 50% more revenue. Apple spends roughly one half of
what Google spends on research, despite having almost three times the revenue!

Microsoft is a bit of a sleeping giant when it comes to innovation. They do a
_lot_ of research and a much of it is of a very fundamental nature that is
decades from being commercializable. Of course, they've been doing this for
long enough that they currently employ the leading experts in some of the
stuff that fit that description ten years ago. Corporate politics under
Ballmer (e.g. stack ranking) and a strong aversion to disruptive changes in
existing products have really reigned MS's innovation in. It will be
interesting to see what happens over the next couple of years as MS software
settles into new form-factors for the first time in ages (that goes double if
Ballmer is shown the door).

Apple is much more focused than Microsoft on immediately commercializable
products. In terms of product-bang for research-buck, Apple probably does a
lot better than Microsoft. Still all MS needs to do to rock Apple's tree is
shake up it's stodgy corporate structure a bit and become more adventurous.

Google, of course, is a huge innovator, but they do tend to be more like Apple
in terms of their focus (i.e. More short term than MS). This focus combined
with double the research budget does suggest that Google is the most likely
company to out-innovate Apple in the short-term. Indeed, we've started to see
this as Android has been gradually getting further ahead of iOS in terms of
features even if it has not yet caught up in polish.

Apple is like a solid work-horse running down a race-track. Google is more of
a thoroughbred, but got stuck in the gate. Now that Google is threatening for
the lead, Apple is applying the whip more generously. MS is like a cheetah
laying by the side of the track. It could come out of nowhere and change
everything or it could just sit their licking its paws.

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LinaLauneBaer
You can't compare the generated revenue like this. Apple is selling a lot of
hardware. Microsoft as well as Google are selling very little hardware.

Thats a bit like comparing the revenue of a real estate agent with the revenue
of a developer selling apps on the app store. A developer of a simple app
making 200k revenue / year has probably a higher profit than a real estate
agent with the same amount of revenue. Selling one house to a client costs you
200k and you get 3% of that… Does this make sense?

~~~
rikf
Revenue is Vanity, Profit is Sanity

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evanm
Innovation has nothing to do with how many R&D dollars you have. When Apple
came up with the Mac, IBM was spending at least 100 times more on R&D. It's
not about money. It's about the people you have, how you're led, and how much
you get it. \-- Steve Jobs, Fortune, Nov. 9, 1998

~~~
tensor
Most of Apple's innovations are not publishable as science papers. In
contrast, IBMs innovations are routinely of publishable kind. Microsoft, HP,
and Google also do a lot of "hard" computer science or engineering work.

Apple's UI and integration innovations not nearly in the same class as those
of the others. That's not to say Apple doesn't help society, or that it's not
creative. But it's certainly not doing the same type of work as the others. In
fact, many of the technologies that Apple has purchased, such as Siri, would
not exist without lots of funding into solving the harder problems.

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sliverstorm
_In fact, many of the technologies that Apple has purchased, such as Siri,
would not exist without lots of funding into solving the harder problems._

That doesn't mean they wouldn't like to take all the credit for it ;)

~~~
CrankyPants
You can do better.

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alwaysinshade
> spending on research and development has grown significantly > to $3.4
> billion—an increase of $1 billion over 2011

This can be construed as either a positive or a negative. It's positive if the
R&D has a particularly focused scope, resulting in coherent
products/technologies that actually hit the market. Often when there's a lack
of vision a company (Microsoft is a great example) will produce a plethora of
solutions in search of a problem and patent the shit out of everything along
the way.

Hopefully this isn't a case of lack of vision where Apple is throwing crap at
the wall until they find something that sticks and packing IP in the piggy
bank for future lawsuits. Big R&D budgets can be a sign of this. We'll see.

~~~
mmanfrin
> Often when there's a lack of vision a company (Microsoft is a great example)
> will produce a plethora of solutions in search of a problem and patent the
> shit out of everything along the way.

What sort of patents has MS exercised in this fashion? They've shown some
amazing tech demos over the past 4-5 years and a lot of them have materialized
in to actual products. Even perhaps the biggest 'demo noshow' has been used:
Surface (i.e., the surface of 4 years ago).

~~~
caycep
Nathan Myrvhold's patent troll firm that has some ties so MS is probably what
was being referred to.

~~~
tptacek
Nathan Myrvhold did not build a patent portfolio out of Microsoft's R&D
budget.

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mertd
What kind of R&D is happening at Apple? I did a search with the keyword
"research" on their job board and not much interesting turned up except for a
few "Data scientist" positions.

~~~
stbullard
As Apple increasingly moves to their own chips (A4, A5, A5X, A6, A6x), I
wouldn't be surprised if the bulk of this additional spending were going to
SoC design. Keeping pace with Intel's ~6.5B R&D budget can't be cheap.

In any case, this isn't really news, or even good reporting. Look at the rest
of the financial statements: SG&A and R&D expenses have actually decreased as
a percentage of net sales over the last two years. Apple is big, so the
absolute numbers are impressive: but percentage-wise, this isn't even a blip.
TFA is cherry-picking numbers and sensationalizing for page views.

See:
[http://files.shareholder.com/downloads/AAPL/2149923444x0x444...](http://files.shareholder.com/downloads/AAPL/2149923444x0x444195/E7A8FE5F-8835-46AB-
ACC2-6FA28DFB546D/Three_Yr_Financial_History.pdf)

~~~
tensor
This move genuinely surprised me. One can certainly argue that Apple's
previous focus on the PowerPC was very detrimental in the long run. As you
point out, they could not even keep up with IBM let alone Intel. I can't help
but wonder if we'll see a repeat performance this time around with ARM and
others outpacing the Ax chip line's development speed.

~~~
jacques_chester
For the volumes in which PowerPC Macs were shipping, it wasn't worth it for
IBM or Motorola to devote serious engineering resources. And at the time Apple
wasn't the cash fountain it is today.

In terms of units shipped, the iPhone and iPad vastly outstrip the Mac. And
those devices repay investment in chip technology by establishing a marketing
point of differentiation.

So actually, given the amount of free cashflow Apple has, it makes sense to
spend up to a billion on embedded chips but not on desktops, where Intel has a
far bigger lead on design and process.

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eta_carinae
I wonder by how much their lawyer budget increased over the past years.

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JoeCortopassi
Worthless Apple bashing over subjects that have been beaten in to the ground,
as late as today, have little use here and only drag down the conversation

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guelo
The article and Apple's filing mention the legal costs of litigation.

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gripusa
We need to understand companies do two kind of R&D , one is where company try
to enhance their current offering to ensure that they remain on the cutting
edge of the current lot (Maps, Search, UI based R&D in apple are examples of
it), while other side of R&D explore other opportunities in CS and try to
break new grounds. These R&D require more budget and are of experimental
nature. In result , the first kind of R&D produce better results in terms of
money spend but provide a narrow path of innovation while the later kind
provide more wider path of innovation but produce less fruite in terms of
money spent.

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dewiz
R&D is how we get new ideas from techies, that's good! However Apple should
spend 10 times that, MS for instance spent 9billions in R&D just in 2012. You
can like the company or not, but reasearch is one way to progress :)

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panacea
Search?

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mamp
I think their recent foray into Maps may give them pause.

