Pixel Envy

Written by Nick Heer.

Something’s Cooking

Neil Cybart:

While pretty straight-forward, R&D as a percent of revenue can be misleading, making it difficult to comprehend how much money is being funneled into R&D. A more relevant and informative way to analyze Apples R&D spend is to look at the actual dollar increase from year to year. This method is more sensible because Apple has a functional organizational structure with a culture based on placing few, but extremely large, product bets. There is little evidence to suggest that Apple has altered the way it approaches new product development and R&D expenditures. In the past, the bulk of Apples R&D program has been focused on specific projects and goals. This stands at contrast with a strategy of setting up a number of R&D labs with no clear directive other than to find future products. If Apple is spending R&D, it is a good bet they have a specific goal in mind for those dollars.

Cybart’s third chart shows just how significant this R&D spending bump is.