Comments on: How Apple gets away with lower R&D spending

By: Horace Dediu

Horace Dediu — Fri, 03 Feb 2012 20:37:26 +0000

I’d like to make sure to give credit to Dirk Schmidt who co-authored the post and did most of the chart work.

By: Ken Heins

Ken Heins — Wed, 01 Feb 2012 00:23:22 +0000

Well for one thing, when you have a sharp focus on what you want, you don’t have to spend a ton of money on analysis. Ever heard of PARALYSIS BY ANALYSIS? Microsoft has no real vision, so they have to spend huge money on this and that, both in terms of market analysis and technological research and TIME, only to find that there was either no customer interest, not technogically feasible, and the big one; The market passed them by. The money got spent, with little or no return. “He got on his horse and rode off in all directions at once”

By: Jason Cook

Jason Cook — Tue, 31 Jan 2012 22:44:56 +0000

Interesting, but a bit misleading. These figures show cost of Research & Development as a percentage of gross sales volume. Increased sales (i.e. success) will make that percentage go down (i.e. make it look like you’re spending less on research). Apple’s absolute R&D expenses actually GREW at an annual rate of 33% during the research period. However, their spike in sales during the same time dwarfed the additional spending (source: http://www.asymco.com/wp-content/uploads/2012/01/Clipboard-1-620×367.jpg ).

By: mjtomlin

mjtomlin — Tue, 31 Jan 2012 21:33:56 +0000

Sorry, but most of you are wrong… it doesn’t matter what the actual amounts were, the percentages tell us how much they spent versus how much they made.

In fact, to display the actual amounts would be meaningless unless they also told us how much each made, thus giving us a percentage.

If Apple spends 1 billion and Google spends 1 billion, so what? What does that tell us, nothing except they both spent the same on R&D. Well the point of the article is to examine which made more money from that 1 billion? Having the amounts only is useless. Knowing also that Apple made 20 billion and Google made 10 billion, we know Apple’s R&D is 5% and Goggle’s is 10%. So we’re right back to percentages again and can see which made better use of the their 1 billion investment.

By: mjtomlin

mjtomlin — Tue, 31 Jan 2012 21:26:41 +0000

Well that was the point of the article, ROI (return of investment). This is usually always measured in percentages. It is trying to demonstrate which companies get the most for what they spend.

If you specify the actual amount, then it would be meaningless without also knowing how much they made. A percentage tells you this without the need of either.

By: awesum

awesum — Tue, 31 Jan 2012 21:08:17 +0000

It costs less when you copy cat versus doing something new

By: HeppuV

HeppuV — Tue, 31 Jan 2012 17:45:04 +0000

How much Apple spends in total and how much Apple pays for patents compared to competitors?

By: Delax

Delax — Tue, 31 Jan 2012 03:07:23 +0000

That’s because Apple doesn’t spend R&D money on self-driving cars or anything that’s not even remotely close their line of business.

By: markhahn

markhahn — Mon, 30 Jan 2012 23:16:27 +0000

Huh? What would Apple perform R&D on? New technology for prettier laptop bottoms? Their _insides_ of their hardware is extremely mainstream – not far from Intel/ARM reference designs.

Apple’s main innovation is in getting a really good design team (Design-type, not R&D-type) putting them in charge of a very small product line, while squeezing the ODM and supply chains unmercifully. Well, also framing the product as a Talisman of Coolness.

By: Steffen Jobbs

Steffen Jobbs — Mon, 30 Jan 2012 23:13:35 +0000

Yes, I’m sure that an Android fanboi would say that Google is doing all the innovating with Ice Cream Sandwich and Google+. WTF. iOS 5 is kicking the crap out of ICS in terms of stability and ease of use.