Primary technologies require a lot of investment.Īpple now develops the processor inside its iPhones, for example, instead of buying off-the-shelf chips from companies like Qualcomm. (It spent $3 billion to buy Beats in 2014, but that company had fewer employees.)Īpple CEO Tim Cook explained the Intel purchase with a phrase that's becoming known as the " Tim Cook doctrine" among Apple observers.Īpple has a "long-term strategy of owning and controlling the primary technologies behind the products that we make," he said. Maestri brought up Apple's recent $1 billion purchase of Intel's modem division, which came with 2,000 employees, its largest acquisition ever from an employee integration standpoint. "There are some types of investments, of course, that are very strategic for us and they will have long-term implications." So, we will continue to do that," Maestri said. "We want to improve the user experience and differentiate our products and services in the marketplace. On its Q3 earnings call, an analyst asked Apple CFO Luca Maestri if the company expects to continue to spend an increasing amount on investment, and he said that the trend would continue. In the June quarter, Microsoft spent 13.4% of its revenue on R&D, and Google spent 15.7% of its sales on R&D.Īnalysts have noticed Apple's rising R&D costs. Historically, Apple has been a laggard behind other top technology companies when it comes to spending as a percentage of its sales, and it still is.
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