Apple increased R&D spending by $1 billion in 2012
arstechnica.com
arstechnica.com
Apple is now spending roughly a third as much as Microsoft does on research despite generating roughly 50% more revenue. Apple spends roughly one half of what Google spends on research, despite having almost three times the revenue!
Microsoft is a bit of a sleeping giant when it comes to innovation. They do a lot of research and a much of it is of a very fundamental nature that is decades from being commercializable. Of course, they've been doing this for long enough that they currently employ the leading experts in some of the stuff that fit that description ten years ago. Corporate politics under Ballmer (e.g. stack ranking) and a strong aversion to disruptive changes in existing products have really reigned MS's innovation in. It will be interesting to see what happens over the next couple of years as MS software settles into new form-factors for the first time in ages (that goes double if Ballmer is shown the door).
Apple is much more focused than Microsoft on immediately commercializable products. In terms of product-bang for research-buck, Apple probably does a lot better than Microsoft. Still all MS needs to do to rock Apple's tree is shake up it's stodgy corporate structure a bit and become more adventurous.
Google, of course, is a huge innovator, but they do tend to be more like Apple in terms of their focus (i.e. More short term than MS). This focus combined with double the research budget does suggest that Google is the most likely company to out-innovate Apple in the short-term. Indeed, we've started to see this as Android has been gradually getting further ahead of iOS in terms of features even if it has not yet caught up in polish.
Apple is like a solid work-horse running down a race-track. Google is more of a thoroughbred, but got stuck in the gate. Now that Google is threatening for the lead, Apple is applying the whip more generously. MS is like a cheetah laying by the side of the track. It could come out of nowhere and change everything or it could just sit their licking its paws.
What I saw as a big problem at MS was a lack of coherent vision to focus that into something tangible. Things are looking better now though.
Apple is, however, a company that makes things; in general, you'd expect lower research spending than software companies.
Thats a bit like comparing the revenue of a real estate agent with the revenue of a developer selling apps on the app store. A developer of a simple app making 200k revenue / year has probably a higher profit than a real estate agent with the same amount of revenue. Selling one house to a client costs you 200k and you get 3% of that… Does this make sense?
What about things like self-driving cars and Google Glass? Also I hardly ever notice the fruits of Microsoft's research. So I'm not sure if they're lying in wait or just terrible at executing.
The transistor was invented in one of those large R&D units, Bell Labs from AT&T, maybe it did not brought money as the Mac or the iPhone but it was real innovation, you could always argue that it was all about people but I think without AT&T money it would have appeared much later in history.
EDIT: deleted some unnecessary words.
Apple's UI and integration innovations not nearly in the same class as those of the others. That's not to say Apple doesn't help society, or that it's not creative. But it's certainly not doing the same type of work as the others. In fact, many of the technologies that Apple has purchased, such as Siri, would not exist without lots of funding into solving the harder problems.
That doesn't mean they wouldn't like to take all the credit for it ;)
This can be construed as either a positive or a negative. It's positive if the R&D has a particularly focused scope, resulting in coherent products/technologies that actually hit the market. Often when there's a lack of vision a company (Microsoft is a great example) will produce a plethora of solutions in search of a problem and patent the shit out of everything along the way.
Hopefully this isn't a case of lack of vision where Apple is throwing crap at the wall until they find something that sticks and packing IP in the piggy bank for future lawsuits. Big R&D budgets can be a sign of this. We'll see.
What sort of patents has MS exercised in this fashion? They've shown some amazing tech demos over the past 4-5 years and a lot of them have materialized in to actual products. Even perhaps the biggest 'demo noshow' has been used: Surface (i.e., the surface of 4 years ago).
> What sort of patents has MS exercised in this fashion?
Ask manufacturers of Android phones how Microsoft exercises its patents.
> a lot of them have materialized in to actual products.
http://news.cnet.com/8301-10805_3-20064439-75.html
"A little more than three years after opening Pioneer Studios, a skunkworks operation to develop consumer electronics and experiences, Microsoft has closed the unit"
"The ill-fated Courier tablet--something of a dual-screen tablet that predated Apple's iPad--emerged from Pioneer."
"the group zeroed in on opportunities that offered revenue opportunities north of $100 million a year. And because the group focused on those opportunities so early, it had a 20 percent success rate."
They developed a new SoC in the A6, made the screen thinner incorporating the touch sensor which was novel and created new manufacturing processes for building the case.
All of these obviously flow to the other products e.g. iMac, iPad Mini.
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/2149923444x0x444...
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.
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.
That being said, I would say they've built both their CS and EE capabilities to the equal of any other company in the world. Custom silicon, compiler tech in llvm/clang/nitro, the whole OS related stuff, etc.
This fight was personal, though. Apple hired two top firms to litigate the case--it seems like they spared no cost to win.
Google will likely top that list over the next few years as they take over from Microsoft as favourite government whipping boy. Especially now that the FTC just recommended anti-trust investigations over FRAND abuse.