Does Apple spend a lot on R&D?

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Apple is spending billions on secret R&D projects — and it keeps spending more

Does Apple spend a lot on R&D?

Tim Cook

(REUTERS/Robert Galbraith )

Apple revealed on Tuesday that it continues to invest increasingly more money on research and development.

Apple spent $2.8 billion on R&D last quarter. That's up from $2.4 billion a year ago. In total, Apple spent $10.39 billion on R&D in 2016 — its highest annual spend ever.

Last year, as Apple's overall revenue was dropping, it seemed as if Apple might cut back on R&D spending. Reports about Apple refocusing Project Titan, its electric self-driving car project, also suggested that perhaps the company would cut back on R&D spending.

But this recent quarter dispelled that notion — Apple may even be accelerating its R&D spending.

Take a look at these charts:

Apple r&d by quarter 2016 BI Intelligence

(BI Intelligence)

Apple r&d spending as share of revenue 2016 BI Intelligence

(BI Intelligence)

This doesn't mean that Apple is one of the biggest R&D companies in the tech industry. As a percentage of revenue, Apple's R&D spending lags behind companies like Facebook, Alphabet, Microsoft, Amazon, Qualcomm, and Intel.

Apple also spent more on stock buybacks in 2016 than it did on research and development.

It's undeniable, however, that Apple continues to spend more money on research and development as it looks for a new product to compliment the iPhone as its main growth engine.

Here's what Apple could be spending its R&D money on:

  • The long-rumored Apple Car. Although reports suggest that Apple is focusing on self-driving software instead of a full electric car, it still has hundreds of employees working on the project.

  • Something in augmented reality, technology that integrates computer graphics and the internet into the real world. AR is a key focus for Apple and the company is working on a pair of AR glasses.

  • Something in the medical world — perhaps a new way to communicate with doctors or improvements to the health functions on the Apple Watch.

  • Chips. One of Apple's key strengths is its chip designers, and it recently opened a R&D center in Israel focusing on chips. It frequently patents new techniques for manufacturing chips.

  • In fact, Apple has recently opened or announced plans to open R&D centers in Japan, China, Indonesia, France, Japan, Sweden, and the UK. Keeping the lights on in those facilities and paying employees can add up.

Last year, Apple CEO Tim Cook was asked about the increase in R&D spending. He said:

"The products that are in R&D, there is quite a bit of investment in there for products and services that are not currently shipping or derivations of what is currently shipping. So I don’t want to talk about the exact split of it, but you can look at the growth rate and conclude that there’s a lot of stuff that we’re doing beyond the current products.”

Apple's reluctance to spend a ton on R&D goes all the way back to founder Steve Jobs. "Innovation has nothing to do with how many R&D dollars you have," he said in 1998.

Apple R&D spending by calendar year Q4 2016 BI Intelligence

(BI Intelligence)

Apple R&D growth vs revenue growth 2016 BI Intelligence

(BI Intelligence)

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How much does Apple spend on RD?

Apple research and development expenses for the twelve months ending June 30, 2022 were $25.262B, a 19.61% increase year-over-year. Apple annual research and development expenses for 2021 were $21.914B, a 16.86% increase from 2020.

How much does Apple spend on R and D?

Apple's R&D expenses in 2020 grew to $18.8 billion compared to $16.2 billion in 2019. The research and development expenses of Apple Inc grew by 14% in 2019 compared to the previous year, rising to $16.2 billion from $14.2 billion in 2018.

Which company spends the most on R&D?

It may come as no surprise that the companies spending the most on research and development are the tech giants. According to data collected by Nasdaq.com, Amazon wins the title of the world's biggest spender, with R&D investments that amounted to nearly $43 billion in 2020, or about 11 percent of its revenue.

How much Google spends on R and D?

As of 2021, Google's parent company Alphabet spent 31.56 billion U.S. dollars on research and development across its many properties. This is an increase of 4 billion U.S. dollars compared to the company's R&D expenses in the previous year.