How Apple gets away with lower R&D spending

Pink Piggy Bank

Updated. For a company that manages to debut a new product line every few years that seizes the public’s attention worldwide, it is rather amazing to see how little it spends on research and development compared to its peers.

Update: On Monday Apple number cruncher extraordinaire Horace Dediu at Asymco put together some charts showing how Apple’s R&D spending trends. While Apple spent $758 million on R&D during the first fiscal quarter of 2012, it’s a very tiny sliver of the company’s overall sales, which were $46.3 billion. What’s most interesting to me is how Apple’s R&D spending as a percentage of overall sales ranks among the industry heavyweights. While $758 million is a lot of money, it’s lags behind the $2.3 billion Microsoft spent on research and development during the same quarter, and Google’s $1.3 billion.

Here’s a chart showing how Apple ranks among its tech industry peers:

Credit: Asymco

Apple sits right below Hewlett-Packard and just above Dell — two companies that haven’t produced anything truly interesting in the consumer realm in years. And it is far below the often innovation-challenged behemoths Microsoft, Nokia, RIM and others.

The takeaway is this: Bloated bureaucracies spend a lot of money on innovation and occasionally make something new and interesting. Steve Jobs’ insistence on maintaining a startup mentality within Apple (even with 30,000+ corporate employees) and the company’s ability to only focus on a few things at a time mean Apple can spend less and get much more for its investment.

Thumbnail image courtesy of Flickr user kenteegardin

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