3 ms·

Apple spent $100 billion in R&D over the last five years. They have a stated goal to get to net cash neutral through buybacks, dividends, and investments. They

Apple spent $100 billion in R&D over the last five years. They have a stated goal to get to net cash neutral through buybacks, dividends, and investments. They can’t easily pour another $100 billion into R&D in a year and expect to get a good return on that investment. The idea that they are doing a share buyback and not investing in new product lines is also not well founded. They are almost certainly doing both.

marcus_holmes 2y ago
Yeah, good point. I kinda agree that it would be hard for Apple to spend all their vast cash reserves on R&D. But the point still stands that a company has choices about what to spend its money on, and if the best use it has for the money is buying back shares then it's not really innovating any more. Share buybacks are not creating more product lines, or investing in the company's future; they're (literally) shrinking the company. The executive team is saying "the best thing we can think of to spend this money on is shrinking the company". That's not a good sign, even if they are also spending big on R&D.
- mike_hearn 2y ago
  They're clearly trying. Look at the vast sums put into Vision Pro. Given the ramped down shipments, maybe that entire decade+ R&D effort will end up financially a write-off. Or maybe they can turn it around and with more improvements sales will pick up. That risk is the core of innovation, wouldn't you say?
  - blitzar 2y ago
    Vision Pro matured out of R&D, Apple Car got scrapped and written off. I am sure there is more in the works or in stealth mode (Ai?), but the big R&D projects appear to have been forced to ship or been canncelled.
    - TheOtherHobbes 2y ago
      I suspect Jobs would have been all over AI years ago, while Cook has allowed the grass to grow under Apple's feet. The car was always a bad idea, and - ironically - always needed strong AI anyway. Phones are basically pocket internet terminals. The metaphor is about to change to pocket personal assistants. There's going to be an awkward period of chaos where the leading edge tech isn't quite good enough to live up to the expectations, but everyone is going to need and want a strong presence anyway. We're about to go from a bicycle for the mind to a sports car for the mind. And unlike a bicycle, the sports car is going to have strong ideas of its own about where it wants to go.
      - subharmonicon 2y ago
        The claim that Tim Cook has let the grass grow under their feet with respect to AI doesn’t match history. Tim hired John Giannandrea away from Google six years ago to lead Apple’s machine learning and AI strategy. He reports directly to Tim, an indication of how important Tim viewed this area (most of the rest of Tim’s reports have been at Apple for decades).
- lytefm 2y ago
  Apples Stock price is has pretty much remained flat YTD whereas Google, Meta and Microsoft have ballooned thanks to the AI hype. > The executive team is saying "the best thing we can think of to spend this money on is shrinking the company". That's not a good sign, even if they are also spending big on R&D. As an executive, buying back shares makes a lot of sense if you believe that your company is currently undervalued and you have a large cash pile. Tim Cook seems to be very optimistic about Apple's future [1], so doing a buyback in the current market might be a smart move. [1] https://finance.yahoo.com/news/apple-ceo-tim-cook-boasts-of-future-ai-plans-after-earnings-beat-214757677.html https://finance.yahoo.com/news/apple-ceo-tim-cook-boasts-of-...
  - deleted 2y ago
    [deleted]
- mewpmewp2 2y ago
  But also if you want to buy shares of your own company, you must think that current shares are undervalued. If say you think you are undervalued 10x then it would be no brainer to buy as many shares as you can.
- tim333 2y ago
  They probably are still innovating but not spending as much on it as the cash they have coming in. There's a lot be said for spending an appropriate amount rather than just tipping in vast excesses of cash because you happen to have it. I used to be involved in the games industry and some company would have a hit, I think MasterMind was an example, and you'd think they must be rich now but no. The process was lots of money comes in, management think we are geniuses we'll put it all into new products, new stuff flops, cash cow declines, can't pay all the new staff, bankruptcy. There's a lot to be said for keeping the spending down.
acdha 2y ago
The one I would fault them on a bit is security. Nobody is perfect there but imagine if they took even 10% to hire a bunch of top people with the goal of replacing every internet-facing bit of memory unsafe code. That’s a huge project but with their resources you could invest in things like tooling for conversion and analysis, and methodically replace every media codec, parser, etc.

marcus_holmes 2y ago

Yeah, good point. I kinda agree that it would be hard for Apple to spend all their vast cash reserves on R&D. But the point still stands that a company has choices about what to spend its money on, and if the best use it has for the money is buying back shares then it's not really innovating any more. Share buybacks are not creating more product lines, or investing in the company's future; they're (literally) shrinking the company. The executive team is saying "the best thing we can think of to spend this money on is shrinking the company". That's not a good sign, even if they are also spending big on R&D.

mike_hearn 2y ago
They're clearly trying. Look at the vast sums put into Vision Pro. Given the ramped down shipments, maybe that entire decade+ R&D effort will end up financially a write-off. Or maybe they can turn it around and with more improvements sales will pick up. That risk is the core of innovation, wouldn't you say?
- blitzar 2y ago
  Vision Pro matured out of R&D, Apple Car got scrapped and written off. I am sure there is more in the works or in stealth mode (Ai?), but the big R&D projects appear to have been forced to ship or been canncelled.
  - TheOtherHobbes 2y ago
    I suspect Jobs would have been all over AI years ago, while Cook has allowed the grass to grow under Apple's feet. The car was always a bad idea, and - ironically - always needed strong AI anyway. Phones are basically pocket internet terminals. The metaphor is about to change to pocket personal assistants. There's going to be an awkward period of chaos where the leading edge tech isn't quite good enough to live up to the expectations, but everyone is going to need and want a strong presence anyway. We're about to go from a bicycle for the mind to a sports car for the mind. And unlike a bicycle, the sports car is going to have strong ideas of its own about where it wants to go.
    - subharmonicon 2y ago
      The claim that Tim Cook has let the grass grow under their feet with respect to AI doesn’t match history. Tim hired John Giannandrea away from Google six years ago to lead Apple’s machine learning and AI strategy. He reports directly to Tim, an indication of how important Tim viewed this area (most of the rest of Tim’s reports have been at Apple for decades).
lytefm 2y ago
Apples Stock price is has pretty much remained flat YTD whereas Google, Meta and Microsoft have ballooned thanks to the AI hype. > The executive team is saying "the best thing we can think of to spend this money on is shrinking the company". That's not a good sign, even if they are also spending big on R&D. As an executive, buying back shares makes a lot of sense if you believe that your company is currently undervalued and you have a large cash pile. Tim Cook seems to be very optimistic about Apple's future [1], so doing a buyback in the current market might be a smart move. [1] https://finance.yahoo.com/news/apple-ceo-tim-cook-boasts-of-future-ai-plans-after-earnings-beat-214757677.html https://finance.yahoo.com/news/apple-ceo-tim-cook-boasts-of-...
- deleted 2y ago
  [deleted]
mewpmewp2 2y ago
But also if you want to buy shares of your own company, you must think that current shares are undervalued. If say you think you are undervalued 10x then it would be no brainer to buy as many shares as you can.
tim333 2y ago
They probably are still innovating but not spending as much on it as the cash they have coming in. There's a lot be said for spending an appropriate amount rather than just tipping in vast excesses of cash because you happen to have it. I used to be involved in the games industry and some company would have a hit, I think MasterMind was an example, and you'd think they must be rich now but no. The process was lots of money comes in, management think we are geniuses we'll put it all into new products, new stuff flops, cash cow declines, can't pay all the new staff, bankruptcy. There's a lot to be said for keeping the spending down.

acdha 2y ago

The one I would fault them on a bit is security. Nobody is perfect there but imagine if they took even 10% to hire a bunch of top people with the goal of replacing every internet-facing bit of memory unsafe code. That’s a huge project but with their resources you could invest in things like tooling for conversion and analysis, and methodically replace every media codec, parser, etc.