26 ms·

Not surprising, since most of the core R&D needed happens in the supply chain -- the fabs, the screen manufacturers, the battery makers, sensors, etc. If the iW

Not surprising, since most of the core R&D needed happens in the supply chain -- the fabs, the screen manufacturers, the battery makers, sensors, etc. If the iWatch for example, uses new curved battery tech or curved screen, that will have arisen mostly from the R&D done by their partners. With the acquisition of PA Semi, Apple does seem to be doing basic chip R&D now. But the industry as a whole would be no where without most of the traditional semiconductor manufacturers doing R&D to keep Moore's law going. I do think it is sad that Apple, with $100+ billion in cash sitting in the bank, isn't spending more on basic research. IBM, HP, Bell Labs, Xerox, et al delivered a lot of serendipitous discoveries by spending money on stuff with no immediate product focus or return. Apple is sucking up the lion share of the mobile revolution's profits, but I think a bigger fraction of that could be channeled back into basic R&D as a whole.

skyebook 13y ago
I agree generally that there can always be more. The big difference to me is that in putting the product first, Apple is ensuring that they'll remain in a position to continue doing this. The trend is in the right direction though, their revenue for 2013 increased less than 10%[1] but their R&D expenditures have (based on a pretty coarse chart) gone up around 20%. [1] http://www.wikinvest.com/stock/Apple_(AAPL)/Data/Total_Revenues http://www.wikinvest.com/stock/Apple_(AAPL)/Data/Total_Reven...
joezydeco 13y ago
..and Microsoft, Atari, Sun, et al sunk billions of dollars into "research" groups with very little to show for it other than a bunch of concept videos and the resumes of the researchers. It's a double-edged sword.
- cromwellian 13y ago
  That's the nature of R&D. There are 100 failures for every 1 success, because often, the usefulness of basic research is unknown. Modern cryptography is based on advances in number theory and abstract algebra. None of the mathematicians over the last 2 centuries who contributed to those advancements foresaw the applications. Modern GPS satellites are dependent upon general and special relativity. Einstein never foresaw it. Much of the military industrial spending that funded the creation of Silicon Valley was not specifically targeted at creating the industries that followed. The whole point of basic R&D is you don't know the economic outcome. It is a quest for knowledge. It may create the next disruptive technology or industry, or, it may not, and just be a another curiosity to be studied by academics. It's a double edged sword, but why should we want swords with only one edge (short term economic success)? Microsoft R&D funds for example, like IBM, mathematic researchers. These people are not working on products or applications, they're working on proving theorems. I don't fault Microsoft for "wasteful" spending. Research and Development is a genetic algorithm for searching the fitness frontier of knowledge space. A whole lot of organisms, or ideas, have to die, before local optima can be broken out of to find the next peak.
  - blah32497 13y ago
    "100 failures for every 1 success" There aren't a lot of examples of big tech companies dumping money into R&D - with no end goal in mind - and then cashing out big time. Even companies that that have gotten useful discoveries from hiring smart people to sit around and invent (Bell Labs, Xerox Park, Microsoft Research etc.) don't ever seem to end up raking in the big bucks. The only thing that comes to mind is MS and their Kinect. Unfortunately the ROI is pretty bad when you just throw money and hope it gives you results. It's cheaper to just buy up startups with interesting ideas
    - joezydeco 13y ago
      Exactly right. There's a big difference between "go think up a way to figure your position on the globe to within 10 cm" and "here's a pile of cash and some beanbags, think up clever stuff and we'll commercialize anything that looks interesting." The only thing that comes to mind is MS and their Kinect. Um, didn't Primesense develop the imaging sensor used in the Kinect? This seems more of the Apple model of "let's figure out a cool use for this interesting device".
      - cromwellian 13y ago
        Actually, it was "go think up a way to deliver an ICBM between the US and Russia with meter accuracy" and "here's several hundred billion dollars to figure it out and build it." The GPS system would never have been built by any startup, period. It took decades to build up the space based infrastructure and engineering know-how to make it, with the backing of a very deep pocketed government that was looking for results, not for profits. We need diversity in research approaches. No one is saying that profit-focused R&D is wrong, just that monoculture is. If you've got $100 billion in the bank, do you need to focus all of it on short term projects, or can you try several strategies.
    - cromwellian 13y ago
      All of the startups you're talking about are sitting on the shoulders of much longer term R&D that was funded by corporate labs or government/academic R&D. When was the last time a small startup produced a huge breakthrough in physics or manufacturing that did not build off of research funded by the public or big consortiums, corporate labs, or universities? I don't care if Bell Labs didn't cash out, just like I don't care if NASA, DARPA, or Sandia Labs makes a profit. Quantum Theorists need work too, and Y-Combinator isn't going to fund them.
dclara 13y ago
Good insights. Apple didn't spend too much R&D money on its own innovation. It integrated all the great technologies together and produced a few best selling products. Can you please reveal what the following technologies are coming from? - Tablet (Palm Pilot?) - Touch screen (HTC?) - Battery - Nano PCB technology It's hard to believe the touch screen technology is suddenly improved and Apple used it for its success almost for free. In 2009, I was busy bidding touch screens on eBay, which were so dumb and expensive. Suddenly, everybody has one in hand. Magic! The question is why those companies that created the technologies didn't profit that much? At least Apple's R&D expense should be sky-rocketing compared with the previous years when iPod touch and iPhone being released even if they didn't created the technologies.
- blumkvist 13y ago
  WAT?

skyebook 13y ago

I agree generally that there can always be more. The big difference to me is that in putting the product first, Apple is ensuring that they'll remain in a position to continue doing this. The trend is in the right direction though, their revenue for 2013 increased less than 10%[1] but their R&D expenditures have (based on a pretty coarse chart) gone up around 20%. [1] http://www.wikinvest.com/stock/Apple_(AAPL)/Data/Total_Revenues http://www.wikinvest.com/stock/Apple_(AAPL)/Data/Total_Reven...

joezydeco 13y ago

..and Microsoft, Atari, Sun, et al sunk billions of dollars into "research" groups with very little to show for it other than a bunch of concept videos and the resumes of the researchers. It's a double-edged sword.

cromwellian 13y ago
That's the nature of R&D. There are 100 failures for every 1 success, because often, the usefulness of basic research is unknown. Modern cryptography is based on advances in number theory and abstract algebra. None of the mathematicians over the last 2 centuries who contributed to those advancements foresaw the applications. Modern GPS satellites are dependent upon general and special relativity. Einstein never foresaw it. Much of the military industrial spending that funded the creation of Silicon Valley was not specifically targeted at creating the industries that followed. The whole point of basic R&D is you don't know the economic outcome. It is a quest for knowledge. It may create the next disruptive technology or industry, or, it may not, and just be a another curiosity to be studied by academics. It's a double edged sword, but why should we want swords with only one edge (short term economic success)? Microsoft R&D funds for example, like IBM, mathematic researchers. These people are not working on products or applications, they're working on proving theorems. I don't fault Microsoft for "wasteful" spending. Research and Development is a genetic algorithm for searching the fitness frontier of knowledge space. A whole lot of organisms, or ideas, have to die, before local optima can be broken out of to find the next peak.
- blah32497 13y ago
  "100 failures for every 1 success" There aren't a lot of examples of big tech companies dumping money into R&D - with no end goal in mind - and then cashing out big time. Even companies that that have gotten useful discoveries from hiring smart people to sit around and invent (Bell Labs, Xerox Park, Microsoft Research etc.) don't ever seem to end up raking in the big bucks. The only thing that comes to mind is MS and their Kinect. Unfortunately the ROI is pretty bad when you just throw money and hope it gives you results. It's cheaper to just buy up startups with interesting ideas
  - joezydeco 13y ago
    Exactly right. There's a big difference between "go think up a way to figure your position on the globe to within 10 cm" and "here's a pile of cash and some beanbags, think up clever stuff and we'll commercialize anything that looks interesting." The only thing that comes to mind is MS and their Kinect. Um, didn't Primesense develop the imaging sensor used in the Kinect? This seems more of the Apple model of "let's figure out a cool use for this interesting device".
    - cromwellian 13y ago
      Actually, it was "go think up a way to deliver an ICBM between the US and Russia with meter accuracy" and "here's several hundred billion dollars to figure it out and build it." The GPS system would never have been built by any startup, period. It took decades to build up the space based infrastructure and engineering know-how to make it, with the backing of a very deep pocketed government that was looking for results, not for profits. We need diversity in research approaches. No one is saying that profit-focused R&D is wrong, just that monoculture is. If you've got $100 billion in the bank, do you need to focus all of it on short term projects, or can you try several strategies.
  - cromwellian 13y ago
    All of the startups you're talking about are sitting on the shoulders of much longer term R&D that was funded by corporate labs or government/academic R&D. When was the last time a small startup produced a huge breakthrough in physics or manufacturing that did not build off of research funded by the public or big consortiums, corporate labs, or universities? I don't care if Bell Labs didn't cash out, just like I don't care if NASA, DARPA, or Sandia Labs makes a profit. Quantum Theorists need work too, and Y-Combinator isn't going to fund them.

dclara 13y ago

Good insights. Apple didn't spend too much R&D money on its own innovation. It integrated all the great technologies together and produced a few best selling products. Can you please reveal what the following technologies are coming from? - Tablet (Palm Pilot?) - Touch screen (HTC?) - Battery - Nano PCB technology It's hard to believe the touch screen technology is suddenly improved and Apple used it for its success almost for free. In 2009, I was busy bidding touch screens on eBay, which were so dumb and expensive. Suddenly, everybody has one in hand. Magic! The question is why those companies that created the technologies didn't profit that much? At least Apple's R&D expense should be sky-rocketing compared with the previous years when iPod touch and iPhone being released even if they didn't created the technologies.

blumkvist 13y ago
WAT?