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As Apple increasingly moves to their own chips (A4, A5, A5X, A6, A6x), I wouldn't be surprised if the bulk of this additional spending were going to SoC design.

As Apple increasingly moves to their own chips (A4, A5, A5X, A6, A6x), I wouldn't be surprised if the bulk of this additional spending were going to SoC design. Keeping pace with Intel's ~6.5B R&D budget can't be cheap. In any case, this isn't really news, or even good reporting. Look at the rest of the financial statements: SG&A and R&D expenses have actually decreased as a percentage of net sales over the last two years. Apple is big, so the absolute numbers are impressive: but percentage-wise, this isn't even a blip. TFA is cherry-picking numbers and sensationalizing for page views. See: http://files.shareholder.com/downloads/AAPL/2149923444x0x444195/E7A8FE5F-8835-46AB-ACC2-6FA28DFB546D/Three_Yr_Financial_History.pdf http://files.shareholder.com/downloads/AAPL/2149923444x0x444...

tensor 14y ago
This move genuinely surprised me. One can certainly argue that Apple's previous focus on the PowerPC was very detrimental in the long run. As you point out, they could not even keep up with IBM let alone Intel. I can't help but wonder if we'll see a repeat performance this time around with ARM and others outpacing the Ax chip line's development speed.
- jacques_chester 14y ago
  For the volumes in which PowerPC Macs were shipping, it wasn't worth it for IBM or Motorola to devote serious engineering resources. And at the time Apple wasn't the cash fountain it is today. In terms of units shipped, the iPhone and iPad vastly outstrip the Mac. And those devices repay investment in chip technology by establishing a marketing point of differentiation. So actually, given the amount of free cashflow Apple has, it makes sense to spend up to a billion on embedded chips but not on desktops, where Intel has a far bigger lead on design and process.
- taligent 14y ago
  You are completely wrong about PowerPC. There wasn't an issue at all with keeping up with performance. The problem was that IBM was pushing PowerPC more and more into the server space and Apple needed a roadmap that factored in laptops.
steevdave 14y ago
Well if they need people, for ARM soc work, Freescale apparently laid off most of the designers of their i.MX chips in Israel

tensor 14y ago

This move genuinely surprised me. One can certainly argue that Apple's previous focus on the PowerPC was very detrimental in the long run. As you point out, they could not even keep up with IBM let alone Intel. I can't help but wonder if we'll see a repeat performance this time around with ARM and others outpacing the Ax chip line's development speed.

jacques_chester 14y ago
For the volumes in which PowerPC Macs were shipping, it wasn't worth it for IBM or Motorola to devote serious engineering resources. And at the time Apple wasn't the cash fountain it is today. In terms of units shipped, the iPhone and iPad vastly outstrip the Mac. And those devices repay investment in chip technology by establishing a marketing point of differentiation. So actually, given the amount of free cashflow Apple has, it makes sense to spend up to a billion on embedded chips but not on desktops, where Intel has a far bigger lead on design and process.
taligent 14y ago
You are completely wrong about PowerPC. There wasn't an issue at all with keeping up with performance. The problem was that IBM was pushing PowerPC more and more into the server space and Apple needed a roadmap that factored in laptops.

steevdave 14y ago

Well if they need people, for ARM soc work, Freescale apparently laid off most of the designers of their i.MX chips in Israel