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Massive R&D spending hints big changes are coming at Apple

May 11th, 2016 at 4:06 PM
Apple Research And Development Expenses 2016

Apple has been significantly increasing its spending on research and development in recent years, and we can safely assume that all that money wasn’t just going to the Apple Watch. Neil Cybart, one of the best Apple observers around, documents big increases in Apple’s R&D expenditures and suggests that the company is planning its “largest pivot yet.”

FROM EARLIER: Top insider says the iPhone 7 Plus is the phone to buy this year

“Apple is now on track to spend more than $10 billion on R&D in 2016, up nearly 30% from 2015 and ahead of even my aggressive estimate,” he writes. “This is a remarkable feat considering that Apple was spending a little over $3 billion per year on R&D just four years ago.”

Cybart goes on to document how Apple’s R&D spending is even outpacing its revenue growth, which is a product both of Apple’s increased spending and of slowing revenue growth.

All of this raises a very obvious question: What is Apple working on? Because the company is so intensely secretive and doesn’t ever reveal its long-term plans publicly, we can only speculate. Cybart offers some smart speculation in this regard and he believes it’s related to Apple’s Project Titan.

“Apple is ramping up R&D because they have a few big bets that require a massive increase in investment,” he muses. “The two most logical areas for these bets are wearables and personal transport initiatives. In both cases, Apple is moving well beyond its comfort zone of selling pieces of glass that can be held in one’s hand. Instead, Apple is literally building a new company with additional capabilities and strengths.”

That sounds pretty exciting.

Check out Cybart’s full post on Apple’s big boost in R&D spending at this link.

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