Apple Ups R&D Spending by $1bn in 2012

Author: Adi Gaskell
Published: November 03, 2012 at 8:03 am

appleDespite Apple having a largely successful year thus far in 2012, their continued battle with Samsung in the smartphone market has encouraged them to invest record amounts in research & development this year.

It appears that Apple have invested a whopping $3.4 billion on research and development during 2012.  That represents growth of around $1 billion on their 2011 figures.

During the same period, the Apple staff levels have swelled by 13,000, many of which are employed in their 400 stores around the world.

Of course, Apple can well afford to bump up spending on R&D.  They are currently sitting on $121 billion in cash.  This is up $40 billion from the end of the 2011 fiscal period, and more than double their 2010 figure.

Apple revealed total sales for the period of $156 billion, which was up an impressive 45% on last year.  Profits for the year were $41.7 billion, up 61% on 2011.  These figures were achieved due to gross margins of 43.9% (up from 40.5% last year).

The investment in R&D is however a reflection of the tough market conditions, with competitors such as Samsung making significant inroads.

"The Company expects competition in these markets to intensify significantly as competitors attempt to imitate some of the features of the Company’s products and applications within their own products or, alternatively, collaborate with each other to offer solutions that are more competitive than those they currently offer," Apple noted in its report. "These markets are characterized by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses."

Apple also acknowledges new and ongoing intellectual property lawsuits will continue to be a drain on company resources. "Such litigation is often expensive, time-consuming, disruptive to the Company’s operations, and distracting to management. In certain cases, the Company may consider the desirability of entering into licensing agreements, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur."


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Article Author: Adi Gaskell

A writer on management issues for publications such as Professional Manager, CMI, HRM Today, Business Works and Technorati. I also cover social media for Social Media Today, DZone and Social Business News.

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