> marginal utility of investing additional money in r&d goes down as r&d spend goes up This would be true if there are no new products with huge potential to e

> marginal utility of investing additional money in r&d goes down as r&d spend goes up This would be true if there are no new products with huge potential to explore. I strongly believe any company's future depends on diversification. Your old products will eventually start becomming commodity with margin race to the bottom. Companies like Apple needs to come up with new product line every two years. To get one new product out, you need to invest in R&D for may be 10 internally because other 9 won't pan out. For each new product you eventually got out, most likely half might not show promise longer term to become big. So you are probably left with 1 big product coming out every 4 years and at the same time your previous big product that is ~12 years old starting to become low margin commodity. Apple is certainly doing great by putting out series of new products at predictable schedule but I think this could easily be twice of current rate given the untapped potential in so many areas.