Apple’s R&D spending reaches new height as it looks beyond the iPhone

Apple is spending more than ever on research and development. According to a CNBC report, Apple dropped $4.2 billion on RD during the third business quarter of 2019, accounting for 7.9% of its revenue, the highest percentage since 2003.

The rising cost isn’t out of the ordinary for most big tech companies, but it is for Apple who usually keeps the overall RD number down. Microsoft and Google, for example, spent 13.4% and 15.7% of their revenue on RD respectively. But as Apple moves to a future that relies less and less on the iPhone, it must spend money to find ways to offset declining revenue.

During the third quarter, iPhone revenue fell 12%, continuing an ongoing slide. Luckily, services and wearables picked up the slack. However, Apple wants to continue balancing its product and service offering and for that, it is spending more on RD than ever and it has already stated that will continue moving forward.

Here’s what Apple CFO Luca Maestri had to say on RD spending during the Q3 earnings call:

Article source: https://www.technobuffalo.com/apple-spending-record-amount-research-and-development-it-searches-next-thing