If you are like me, you kind of went Whoa for a second hearing that 100 Apple folks are working on a watch. That seems like a lot of folks to me. Perhaps this is innovation. It certainly is a space where there is no clear market leader and nothing really new has taken off with large amounts of the general populace. There seems like opportunity there, even though personally I think I'm unlikely to replace my stylish mechanical watch for a digital one.
But for folks that say Apple needs to innovate more and use its cash pile to innovate, I'd like to point out that even if you assume that each of those 100 Apple employees costs $500,000 a year in salary, overhead and equipment costs, then this innovation is costing Apple "only" $50 million a year. And that is for what seems to me to be a big team. That works out to far less than half of what Apple makes EVERY DAY in profit. Get it folks? Even crazy R&D expenses can't add up to anything that really is a significant cost compared to Apple's projected profits.
But for folks that say Apple needs to innovate more and use its cash pile to innovate, I'd like to point out that even if you assume that each of those 100 Apple employees costs $500,000 a year in salary, overhead and equipment costs, then this innovation is costing Apple "only" $50 million a year. And that is for what seems to me to be a big team. That works out to far less than half of what Apple makes EVERY DAY in profit. Get it folks? Even crazy R&D expenses can't add up to anything that really is a significant cost compared to Apple's projected profits.