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Peak Apple: Cupertino belatedly spends some money on R&D

Jobsian diktat 'innovation nothing to do with R&D' binned

Internet Security Threat Report 2014

Apple is ploughing more cash into research and development ahead of new product launches expected in the coming 12 months.

Cupertino shelled out a hefty $1.19 billion on R&D in the first three months of this year; an increase of 41 per cent on the $841 million it spent in the same period last year.

If the pattern continues, Apple will spend something in the region of $4bn on R&D this year in the hope of struggling free of a general malaise in the company's fortunes that is already being dubbed Peak Apple*. By comparison, Microsoft spent $9.6bn on R&D in 2011.

When Tim Cook announced Apple’s annual profit results earlier this week, he promised “amazing new hardware, software, and services” would be released this autumn through to 2014.

“We’ve got a lot more surprises in store,” he promised.

Cook has failed to unveil any major new product lines since taking over from Steve Jobs in 2011, instead relying on new versions of old favourites. Since then he has announced the iPhone 4S and 5, as well as the iPad Mini.

He also presided over the disastrous launch of Apple Maps, watched the fruity firm's stock prices slump and profit growth slow to the lowest point in a decade.

Cupertino said the increase in spending would fund a “increase in headcount” and “expanded R&D activities”.

Apple has historically been a stingy spender on R&D, spending just 2.5 per cent of its revenue on research compared to Google’s 13 per cent.

Steve Jobs famously believed that “innovation has nothing to do with how many R&D dollars you have” and tried to foster the sort of focused creativity exhibited by start-ups. ®

*By us, anyway

Internet Security Threat Report 2014

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