Apple released last week the results of its third fiscal quarter of 2019 – which, according to the Cupertino giant, was the company’s largest June quarter. In addition to the good profit margin (thanks to the growth in revenue from Apple services), the company’s investments in research and development (R&D) also reached a new historical index for a single quarter, as disclosed by CNBC.
During the third fiscal quarter of 2019, Apple invested $ 4.2 billion in R&D, about 7.9% of its total revenue. According to the CNBC, this is the highest percentage invested since 2003 (when Apple sold only iPods and Macs), as illustrated in the chart below shared by PCMag.
If Apple’s investments continue at that peak, the company will invest more than $ 16 billion (amount invested in 2018) in R&D this year.
Even though it has defined a new historical index, Apple’s investments in R&D are still behind those of other technology companies – in fact, Apple has never been the largest investor in this sector. In the last quarter, for example, Microsoft invested 13.4% of its revenue in R&D, while Google invested 15.7%.
The increase in R&D spending comes at a time when Apple’s golden egg hen, the iPhone, recorded a drop in sales. IPhone revenue in the last quarter fell 12% from the same period last year. So Apple is investing in essential technologies that can equip devices that have not yet been built – but the development and exploitation of cutting-edge technology comes at a cost.
Despite the significant amount, it is difficult to know where all that money is concentrated. A smaller part of this value probably goes to products that have already been launched, while the larger amount must be destined to discover new technologies, which may equip future products, such as those related to the “Project Titan” and to “Apple Glass” (which may have been temporarily suspended).