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While much attention has been placed on Apple's first quarterly revenue decline in thirteen years, with some suggesting that the iPhone maker may push deeper into services to combat the slowdown, there is evidence to suggest that Tim Cook and company have bigger plans in store.

Apple analyst Neil Cybart of Above Avalon notes that Apple is now on track to spend a record $10 billion on research and development this year, up nearly 30 percent from 2015 and significantly more than the little over $3 billion per year it was spending on R&D just four years ago.

Apple-RD-Spending-2016.png

Cybart believes that the most likely explanation for Apple's increased R&D spending is that the company is looking to make a long-term pivot beyond the iPhone, which currently accounts for nearly two-thirds of the company's revenue. His predicted product of the future: the widely rumored Apple Car.

"Apple is not spending $10 billion on R&D just to come up with new Watch bands, larger iPads, or a video streaming service," he wrote. "Instead, Apple is planning on something much bigger: a pivot into the automobile industry."

Apple's R&D spending has experienced a significant uptick since mid-2014, which Cybart attributes to Apple Car development over the past few years. There were similar quarter-over-quarter spikes in spending leading up to the release of the iPhone, iPad, and Apple Watch, as illustrated in the chart below.

Project-Titan-RD.png

The analyst added that Apple has likely already spent upwards of a few billion dollars on Project Titan, the alleged internal codename for the Apple Car, with R&D spending likely to hit at least $14 billion per year by 2017 or 2018. He predicts the odds of Apple releasing an electric vehicle are at least 80 percent.
There is one very simple reason for my high degree of confidence: Project Titan is a long-term pivot. I don't consider Titan to be just another project that Apple has been tinkering around with in the lab for years like an Apple television set or Apple Pencil. Instead, Project Titan is much more about building a foundation for Apple that will literally represent the company's future.
Apple is widely rumored to be working on an electric vehicle that could launch by 2020. The bulk of research and development may be centered in the Santa Clara Valley area, near Apple's existing Cupertino headquarters, led by a team that includes former Tesla, Ford, and GM employees and other automotive experts.

Related Article: Apple R&D Reveals a Pivot Is Coming -- Above Avalon

Article Link: Apple R&D Spending on Track to Top Record $10 Billion Amid Electric Vehicle Rumors
 

radus

macrumors 6502a
Jan 12, 2009
634
371
will buy stocks shortly before the car is ready -- should be very low at this time ...
 

TaviDuprix

macrumors member
Mar 15, 2016
98
103
Tennessee
I hope that cars are not the only big thing that this money is going towards. Would love to see some other products rolled out in the coming years.
 
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samcraig

macrumors P6
Jun 22, 2009
16,745
41,908
USA
Another takeaway here is that R&D is still only a fraction of their "bank." Further - despite was some here might claim or believe, the amount dedicated to R&D for the iPhone was "tiny."
 
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Mollan

macrumors regular
Jul 29, 2013
114
73
The Netherlands/Italy
Just think about how much a new player in the car industry can revolutionise the transportation.
No steering wheel, no commands.

Just Air conditioning, radio/sat-nav on a huge monitor (Siri?, hopefully not with Apple Maps :p) and full autopilot, from the start to the end.

The only problem would be the price imho. If 600€ could be too much for many people to spend in a phone...this car definitely would have costs out of any reasonable scale (Tesla-like). And also with ridiculous margins (Tesla sells every car at loss).
 
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actinide

macrumors regular
Apr 7, 2016
128
118
There are so much rumours about an apple car and because its Apple, people have lots of expectation. However i feel like it will end up a big disappointment (such as homer simpsons design of a car for his half brother). What revolutionary will they deliver that others didn't think of. Besides, they are entering a market in which the room for growth is very slim.
 
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