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Apple R&D Spending on Track to Top Record $10 Billion Amid Electric Vehicle Rumors
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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.
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
Maybe the new campus isn't supposed to look like a spaceship. Maybe it's supposed to look like a tire!
Did Apple ever sell 61.4 million Macs in a year, no less a quarter (51.193 million iPhones, 10.251 million iPads sold in the past, "horrible" quarter, vs. 4.034 million Macs)? $37.27 billion in combined iPad and iPhone sales, vs. $5.107 billion in Mac sales. Net income of $10.5 billion? Over one billion Apple products in active use? Definitely, it's time to abandon all hope!
Yeah, sales are down. For now. Meantime, Apple has about $170 Billion in net cash and marketable securities (after subtracting debt). And even if sales simply level out, instead of grow (I know, Wall Street only respects growth...) - is that a business any sane person would walk away from as a failure?
Yeah, nothing is forever, and for people who dislike Apple, that end can't come soon enough. Keep wishing, but with the kind of money Apple has, they could hire conservative management, make some conservative investments, and coast for the next 100 years.
$10B in R&D yet the Mac Pro hasn't been updated in 3 years.
$10B in R&D yet Apple still has no external Retina Display.
$10B in R&D yet the new Apple TV can't do 4k video.
Throwing money at the wall isn't going to magically generate a winning idea, but Apple will realize that when it's in the middle of its downward spiral. A car, who are they kidding? By 2020 Tesla will have shipped probably a million or more Model 3s, and by then all of the major players will have a long range BEV in the mix. What will be unique about Apple's take on a car, charging drivers 50¢ per mile and 99¢ per song they listen to?
My goodness, Apple can't even manufacture its own products and it aims to make a car. That's some good crack they're smoking at Infinite Loop.
$10B in R&D yet Apple still has no external Retina Display.
$10B in R&D yet the new Apple TV can't do 4k video.
Throwing money at the wall isn't going to magically generate a winning idea, but Apple will realize that when it's in the middle of its downward spiral. A car, who are they kidding? By 2020 Tesla will have shipped probably a million or more Model 3s, and by then all of the major players will have a long range BEV in the mix. What will be unique about Apple's take on a car, charging drivers 50¢ per mile and 99¢ per song they listen to?
My goodness, Apple can't even manufacture its own products and it aims to make a car. That's some good crack they're smoking at Infinite Loop.
not upset at all i just don't see the connection or value in it, not to spread yourself thin and lose focus on what originally made you great. why don't they make refrigerators too while they are at it and start a chain of shoe stores?
Never said Apple iPhone and iPad aren't profitable, it's just that the sales numbers aren't what they once were and are now declining--especially apparent after Q1 2016. As you point out however, I'm sure Apple with all their cash will be just fine for the long haul.
$10B a year is simply staggering. I work in aviation at a leadership level. $6-$10B over 4 years would get you an entire airplane from scratch (777X). $2B over 4 years would get you an entire latest technology jet engine (GE9X or LEAP for example) from scratch. $10B per year: that is some serious money. That is more than just headcount. It is disposable test articles, P&E, material, tooling if it's all expensed in the current year, physical stuff. Amazing.
I really hope so. The amount of "innovation" we are seeing these days leaves a lot to be desired.
You should know that the CEO Mr. Travis Kalanick intends on replacing drivers with fleets of autonomous vehicles.
If you build the car right, it's not just a computer, it's a self-mobile computer. The mind boggles at the possibilities...
[doublepost=1463116119][/doublepost]Ok, so who's going to be the Foxconn equivalent for their car? Surely they're not going the Tesla path and building it themselves.
So...who's the manufacturing partner?
Not everyone in the world needs to be able to buy their own car in the future. Because they're autonomous, you can just call up a car when you need one and it'll come and collect you. Pay per ride. Uber without drivers.
No they don't.
Tesla makes losses because it's a startup that reinvests all its income (and then some) back into expanding the business.
The margins on each car it sells are actually very healthy.
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A modern electric car is basically just a computer on wheels.
The most important things are software, design, engineering. Apple are good at all those things.
Besides, they have to do something with all that capital. And electric, autonomous vehicles have the potential to solve some of the more serious of humanity's problems far more than the next iteration of the iPhone will.
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This is what I heard of...and the last quarter report was still negative, so they are loosing more money than what they make and re-invest.
http://www.reuters.com/article/us-teslamotors-cash-insight-idUSKCN0QE0DC20150810
Also, it would be super funny to look at Google, Apple and Tesla to teach cars how to drive in European, 1000-2000 years-old cities :'D
This report has been debunked plenty of times already:
http://www.fool.com/investing/gener...-motors-could-be-profitable-if-it-wanted.aspx
"As a percentage of sales, Tesla's operating expenses are significantly higher than traditional rivals specifically because it is funding growth"
If Tesla wanted to stop growing and remain a pretty niche-sized automaker, they could be profitable tomorrow. Significantly more profitable, per vehicle, than Ford and GM.
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Not really a big issue. AI can handle driving in tight, confined spaces better than a human driver because it can perfectly determine distances and clearances. And has a constant, 360 degree view of its environment with no blind spots.
The biggest challenges in autonomous vehicles relate to interaction with other road users. Especially when it comes to pedestrians, cyclists, etc because safety is paramount. Those same problems exist whether you're on a wide, straight American road or a narrow, winding European one. In fact, developing for European streets might be better because it will face more kinds of unusual scenarios more quickly!
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Good to see Apple investing, but what is going to be huge is augmented reality glasses.
Microsoft, Google, Magic Leap and Meta are all doing it wrong. The problem to fix is the form factor. It doesn’t matter if you can manipulate objects in 3D space or explore virtual worlds in your glasses, if people can’t, or are not willing to, have their glasses on all day, it will be a niche product.
Cool graphics will not sell the product to the masses, usefulness will. We don’t need fancy graphics for subtitles, notifications, text messages, PIN codes, teleprompter, automatic name identification, todo lists, musical notes, wingman mode etc.
If I was Tim Cook I would invest a lot of money in augmented reality hardware. If Apple can get a two year head start, they will own the market, like they did for iPhone and iPad.
Microsoft, Google, Magic Leap and Meta are all doing it wrong. The problem to fix is the form factor. It doesn’t matter if you can manipulate objects in 3D space or explore virtual worlds in your glasses, if people can’t, or are not willing to, have their glasses on all day, it will be a niche product.
Cool graphics will not sell the product to the masses, usefulness will. We don’t need fancy graphics for subtitles, notifications, text messages, PIN codes, teleprompter, automatic name identification, todo lists, musical notes, wingman mode etc.
If I was Tim Cook I would invest a lot of money in augmented reality hardware. If Apple can get a two year head start, they will own the market, like they did for iPhone and iPad.
Clearly you do not own a Tesla, if you did you would see the light. I didn't get the connect until Tesla so I can relate.
[doublepost=1463132953][/doublepost]To put it in perspective, Tesla spent about 1.2B in R&D the past 2 years. Maybe Apple is designing a new Starship Apple.....
The price of a new iPhone 6plus can buy you a decent second hand car. Wonder what the price of a new Apple Car will be.
No, what would I do with that information? Don't have Apple shares.
I use my 2nd gen iPad (Would like an iPad pro, but it's not ready yet), 6S Plus and MBPs and am quite happy with all of them. Handing dwon my old G5 iMacs and they still go strong for the kids I give them to.
Have a few ipods in some drawers as the iPhone made iPods unnecessary.
I think the car project will be very interesting as the whole car industry is rapidly changing. Too many people are distracted and addicted to smartphones they are not driving safely. I think we have all been guilty of this before. People would rather text and be on their phone then focus on driving. I think it's great and cant wait to see what Apple has to rival the new Tesla cars.
Funny you say that. I'm still rocking my 2011 iPad 2 that's very slow running iOS 7. Been reluctant to upgrade since it's only a web surfing/Youtube tablet for my kids.