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The cost of progress: charting Apple's rising R&D spending

The cost of progress: charting Apple's rising R&D spending

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Apple rumors of an iWatch, a game-changing TV, and magical 3D interfaces persist, fueled in part by CEO Tim Cook's opaque comments about entering "new product categories." But whatever Apple is working on, it's clearly requiring additional money for research and development. How much? Apple spent a total of $4.475 billion over the 2013 financial year. That's up 32 percent from last year's $3.4 billion, and a massive 87 percent from 2011's $2.4 billion spending.

Of course, due to rising profits, the ballooning R&D costs actually represent a very similar percentage of the company's income being invested over the past two or three years. Back in the days of iPhone development, however, Apple was proportionally investing double what it is now.

It's difficult to compare Apple's R&D spending directly to its competitors — Microsoft, Google, Samsung, and even Amazon offer a far wider range of products and services. Microsoft, for example, spent $10.4 billion in its last financial year on R&D, while Samsung announced a plan in July to spend $4.5 billion purely on buildings where R&D will take place. Regardless, over the last 10 years, Apple's relatively frugal spending pattern has been unmatched at producing a very large financial bang for every R&D buck. Question is, will the research being done on the development of those new product categories continue the trend?

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