R&D still a priority at Apple despite revenue dip

By : |July 28, 2016 0

If I ask you, name one thing that Apple stands for, you would probably say iPhone. Sorry, but that’s not the answer. iPhone is only a small part of a larger phenomenon called Innovation that lies at the core of Apple’s long successful journey, something that Steve Jobs worked on and for. And Apple still believes that innovation can and will steer it out of the rough waters, its ship presently finds itself in.

Though Apple post a 15 percent decline in revenues as compared to same period last year but that has not stopped it from doing the thing it does best — innovate. And this is evident from the expenditure figures of Apple which show that the spending on R&D was on rise despite the decline in revenues.

Apple spent $2.5 billion in research and development during the third quarter. This number is 25 percent more than the same period last year. More interestingly, this figure accounts for 5.9 percent of the total revenues and that is the highest share in at least the last four years.

If one looks at a broader timeline, then also Apple impresses with its extensive focus on R&D lately. The company has spent $7.475 billion on research in the past nine months as against $5.847 billion during the same period last year.

Perhaps a new innovation can only break Apple from the saturation in sales of its existing products.

Notably, Apple has also begun to invest externally most significant being its $1 billion investment in China’s DidiChuxing. However, CEO Tim Cook said that the investment in Didi was mainly aimed towards a better understanding of the Chinese market and they are more focused on their internal development.

On the question of the focus of this R&D, Cook admitted that the company was investing in new products and devices- “There’s quite a bit of investment in products that are not currently shipping,”but refused to divulge details on the specifics of the products.

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