Apple Explains Why Its R&D Spending Is On the Rise

Apple has steadily increased its spending on research and development over the past few quarters. An executive with the company explained why that’s the case. From a report on CNBC: Company’s financial guru attributes the spending to something of a much smaller scale: chips. It may not sound like it, but that research is “very strategic and important” for Apple to differentiate itself from the rest of the industry, chief financial officer Luca Maestri said on Tuesday at the Goldman Sachs Technology and Internet Conference in San Francisco. “Today, we do much more in-house development of some fundamental technologies than we used to do a few years ago, when we did more of that in the supplier base — the work we do around processors or sensors,” Maestri said. “It’s very important for us because we can push the envelope on innovation, we can better control timing, cost, quality. We look at that as a great strategic investment.” On Tuesday, Maestri also noted that Apple’s “product portfolio is much larger than it used to be,” and that keeping all these products moving along in parallel adds up, especially with smaller markets, like the Apple Watch. While Maestri said Apple drops a “meaningful” amount of cash on products that do not generate revenue today, these products are not very large “in the total scheme of things,” Maestri said. “They add up over time, and hopefully, those are good bets that we are making for the future of the company,” Maestri said.


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