Apple’s spend on Research and Development (R&D) has been a point for discussion as it has allocated $16 billion for 2019, according to the latest report by CNBC.
New iPhones, MacBook, iPad models, Wearables, and fresh Services launch have been lined up for traditional September/October 2019. This also speaks for the type of products and services it will bring out for 2020 and years ahead.
Apple Places its Bet on New Products & Services Through R&D
Since its inception, Apple has been focussing on its star performer iPhone models and variants that kept popping up from time to time. It earned record revenues and profits for the Cupertino company.
The debate will rage from all corners regarding the investments made – say for example – in the acquisition of Intel unit at the cost of $1 billion to source chips in-house and reduce costs of manufacturing the iPhones, ultimately. Apple currently sources them from Qualcomm.
Apple is also working on Face ID and under-screen Touch ID, and Augmented Reality and Virtual Reality (AR glasses) areas will all need a lot of research and development efforts to bring out the products by 2021.
In the earnings call Tim Cook, CEO Apple Inc., clearly bet Apples foray in the Services segment. Services include Apple Pay, Apple Card, and Apple Wallet besides Apple Apps Store that looks like a sure shot money-spinner for the company.
“We want to improve the user experience and differentiate our products and services in the marketplace. So, we will continue to do that,” Maestri said. “There are some types of investments, of course, that are very strategic for us and they will have long-term implications.“
Apple may also look for a few acquisitions and innovations in its way to climb the success ladder in areas like Music and Podcasts where it is checking out original content.
Apple’s R&D Allocation to Shoot on Forays in New Technologies
If comparisons drawn on the R&D spend over sales between tech giants – Microsoft (13.4%), Google (15.7%), Apple stands nowhere. So, the R&D amount stood at $4.2 billion for the Fiscal Quater III 2019, was 7.1% of the revenue earned for that period – the highest ever since 2003.
Apple will need to allocate a large budget on Research and Development as it dives deep in Artificial Intelligence – Driverless or Self Driving Cars.
On the last point, Apple is reported to be on a hiring spree to augment its effort in the area that sees Tesla as a ‘big daddy.’
So, besides AR/VR and new iPhones and MacBooks, etc., are you looking forward to self-driven cars from Apple? Tells us now as we can set the tongues wagging!!