According to foreign media reports, Apple's R&D expenditure in 2018 is expected to be as high as US$14 billion, which has increased nearly twofold in four years, accounting for the highest percentage of revenue in 14 years, which highlights Apple’s growing product ambitions.
After a brief period of calm, Apple's R&D spending skyrocketed again. Apple's financial guidance for the second quarter of 2018 shows that the company will soon announce the largest increase in R&D expenses in its historical quarter. Apple will invest $14 billion in R&D in fiscal year 2018, almost twice as much as R&D spending four years ago. The dramatic increase in Apple’s R&D expenditures triggered many speculations about whether the company’s product line and management’s overall attitude toward R&D has changed.
Apple's R&D spending has seen unprecedented growth
Apple will spend 14 billion U.S. dollars for R&D in fiscal year 2018, which will exceed the sum of Apple's R&D spending from 1998 to 2011. Since 1998, the CAGR of Apple's R&D expenditure has reached 32%. As shown in Figure 1, the growth rate of Apple's R&D expenditure over the past 20 years is amazing.
Figure 1: Apple's R&D Expense Growth Chart (Year)
Another way to prove that Apple's R&D spending has grown significantly is based on quarterly growth. As shown in Figure 2, from the second quarter of fiscal year 2017, the growth of Apple's R&D expenses has always been on an upward trend. It is expected that in the second quarter of fiscal year 2018, Apple’s R&D expenditures will increase by US$725 million year-on-year, which will be nearly 25% higher than the R&D expense growth record of the previous period. This $725 million data is derived from Apple's operating expense guidance and estimates of SG&A and R&D costs. The recent increase in R&D spending shows that Apple is definitely doing something.
Figure 2: Chart of year-on-year growth in Apple's R&D expenses (quarterly)
Three Projects Leading to Apple's R&D Expenditure
It is easy to assume that Apple's R&D spending has increased year by year, but it only reflects Apple’s expanding product line. However, the reasons behind the growth of Apple's R&D spending are even more complicated. The three items that led to Apple’s R&D expenditure growth are:
1) Existing products. Taking into account the broader product mix, Apple is doing more now.
2) Internal technological development. Apple has taken control of core technology as its main goal
3) New product. The product Apple is developing does not guarantee future commercial viability.
Once the commercial viability of a project has been established, it is difficult for Apple to categorize subsequent manufacturing or product evolution as a research and development area. This means that the money spent on developing a new version of an existing product does not need to be included in the R&D expenses. Instead, these costs may have to be marked as capital expenditures and amortized over the life of the asset.
Another project that has no impact on Apple's R&D expenses is the construction of an apple orchard. The cost of real estate construction used by ordinary companies, and even some design laboratories needed for R&D, cannot be classified as R&D expenses. On the contrary, to classify real estate as R&D, the future commercial feasibility must be uncertain. For example, in the mid-2010s, the numerous buildings that Apple acquired or began to rent, especially ProjectTitan, were likely to have boosted R&D spending at that time.
New product
Although Project Titan was an important driver of R&D expenditure growth a few years ago, there are now two new projects that have contributed to the recent surge in R&D spending:
1) Smart glasses. We know that Apple is developing smart glasses in view of Apple's M&A records (Vrvana, SensoMotoric Instruments, patents, and subtle clues found in Apple's management reviews). The team dedicated to this effort may be very large.
2) Content distribution efforts. Apple seems to have formulated a broader strategy on content and doubled its content as a publisher. Apple has provided music, video, apps, news, and written content to more than 850 million users and has invested heavily in this area.
Apple's efforts to launch video streaming services from the ground up may be classified as R&D. For example, Apple does not guarantee that the money spent on script development will result in commercially viable video streaming products. According to reports, Apple spent $1 billion on original video content.
Apple continues to work hard to strengthen its hardware capabilities to control the brains that power its products. As long as the by-products of these efforts can bring products that differ significantly from existing products, it is possible for Apple to classify these efforts as R&D. The ongoing costs associated with Project Titan may also be significant, especially in relatively small products found throughout Apple.
Policy changes
Despite the fact that Apple is still a very focused company on the product side, the money spent on research and development seems to indicate that Apple’s management may loosen up its focus slightly while studying new ideas. As seen in Appendix 3, Apple’s R&D spending as a percentage of revenue is currently the highest level in 14 years. This means that Apple's investment in research and development has increased even though sales have increased significantly over the years. For some companies, this may not mean anything, but for Apple, it cannot be ignored.
Figure 3: Apple's R&D expenses as a percentage of revenue
The growth of Apple's R&D spending may be explained as follows
1) Greater ambition. Apple finds itself in a position to do more things. It is estimated that Apple spent 150 million US dollars in 2005 to create the first iPhone. At the time, this was a very substantial cash for Apple. After nearly 10 years, Apple found that it costs so much money to develop a program for the upcoming video streaming service. To a certain extent, Apple management may feel that it is obliged to do more things given Apple's size. As Tim Cook recently said: "We can do more than we have done in the past because we are bigger."
2) Competition. One factor that has driven Apple to achieve more goals is competition. Controlling hardware and software alone is not enough. Apple now finds it necessary to control the technology that powers its devices. It is not cheap to develop basic technologies in-house. Apple has set up a series of R&D centers around the world (China, Japan, India, Indonesia, New Zealand, Canada, France, Italy, Israel, Sweden, and the UK), many of which are The task is to develop hardware. Some R&D outposts are the result of Apple’s acquisition of a talent team.
3) More experiments. When it comes to new ideas and processes, Apple may do more experiments. Although there is no evidence that Apple will allow more ideas to enter the market, Apple’s management does hope to say “no†to more ideas in this position.
The third point involves additional experiments and the results are the most interesting. For companies at Apple's location, focus on a few things at any time and use it as a core capability to increase experimentation.
Apple's R & D theory
My view of the sharp rise in Apple's R&D spending is that management is becoming more ambitious. The future of Apple depends on the new industry. Just as Apple moved from desktops or laptops to personal music players, smart phones and smart watches, the company will need to enter new industries to maintain relevance. This is not a company that clings to the iPhone because of fear of change. Apple management is investigating new ideas and processes to support future entry into new industries.
This explains why Apple’s continued interest in transportation and Project Titan is of interest. Apple has little expertise in this area. Although we have no experience in developing script content, we still see Apple building a new entertainment sector from scratch. No matter from which case, Apple has to rely on external recruitment and substantial cash expenditures to establish its core competitiveness.
This is not to say that Apple has thrown its focus away from the window. Apple still has strong selectivity in M&A activities and in deciding which products enter the market. Apple’s R&D team did not provide funding for major R&D projects and did not plan to launch new products on a single day. Instead, it focused on ideas that are at least likely to see the dawn. Making FaceID a reality is a typical example of Apple's years of research and development.
The main reason for facial recognition is that Apple’s chief design officer Jony Ive and his industrial design team oversee Apple’s product vision and user experience for Apple products. With only about 20 members, Jonny and his team can only do so much at any time. To some extent, Apple's organizational and leadership structure is to protect Apple's over-expansion and over-expansion protection. Apple’s strategy seems to be to do the opposite and to place bigger bets on some products instead of trying to expand the design team to develop more products.
These bigger bets are in the form of having the core technology of Apple devices. Apple wants to reduce its dependence on others. We will soon see that each Apple product will be driven by an internally developed core technology. Just a few years ago, this reality was only a "daydream." Apple believes that this strategy will give them an advantage in the market.
For Alan Kay, the genius computer guru, the new twist is that people who really take software seriously should make their own hardware. We are moving in this direction and companies that are serious about software should design their own silicon chips. With $285 billion in reserve cash, Apple has the freedom to pursue this grand goal. It is this kind of motivation - to control more user experiences while entering new industries, and to promote significant growth in Apple's R & D spending.
Fast Recovery Diode (FRD) is a semiconductor diode with good switching characteristics and short reverse recovery time. It is mainly used in switching power supplies, PWM pulse width modulators, inverters and other electronic circuits as high-frequency rectifier diodes. Free-wheeling or damper diodes are used. The internal structure of the fast recovery diode is different from that of an ordinary PN junction diode. It belongs to a PIN junction diode, that is, a base region I is added between the P-type silicon material and the N-type silicon material to form a PIN silicon wafer. Since the base area is thin and the reverse recovery charge is small, the fast recovery diode has a short reverse recovery time, a low forward voltage drop, and a high reverse breakdown voltage (withstanding voltage).
Fast Recovery Stud Diode,Stud Type Fast Recovery Diode,Fast Recovery Diode,Stud Rectifier Power Diode
YANGZHOU POSITIONING TECH CO., LTD. , https://www.cnchipmicro.com