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You are here: MacNN Forums > News > Mac News > Apple R&D record spend for 2016 linked by analyst to Apple Car

Apple R&D record spend for 2016 linked by analyst to Apple Car
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NewsPoster
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May 13, 2016, 07:10 AM
 
Apple's research and development budget is on track for a record in 2016, which as we have previously noted , will crest $10 billion for the first time. One analyst is now asserting that Apple's 30 percent jump in R&D spending year-over-year can be linked to the rumored Apple Car, also known by its rumored codename of "Project Titan". Analyst Neil Cybart attempts uses a chart that captures Apple's R&D expenditure from 1996 and overlays it with relatively recent major Apple product launches. Even as recently as four years ago, Cybart notes that Apple was spending just over $3 billion, arguing that the only plausible explanation for such a dramatic upturn in R&D expenditure can only be explained in a planned Apple pivot into another market in the long term, rather than relying on its iPhone over the short to medium term.


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

Almost immediately, however, Cybart's assertion was dismissed by none other than former Windows chief Steve Sinofsky in a series of tweets. Sinofsky, now an investment council for A16z, pointed out that drawing a link between an increase in R&D spending and Apple product launches is tenuous at best. For example, the late Steve Jobs revealed that the iPhone was the culmination of ten years of R&D. Further, he adds that just because a product like the iPhone has now shipped, it doesn't mean that R&D on the product stops.

"It is incredibly difficult to dramatically reduce R&D on successful products even though the impact in near term is negligible," Sinofsky tweeted. "But it is incredibly easy to increase spend to maintain. Every feature/add must scale across dimensions that previously didn't exist."

With Apple now heavily invested in four key platforms, iOS, OS X, tvOS and watchOS, it is not difficult to imagine that Sinofsky is more on point that Cybart. Even if Apple is indeed working on an electric vehicle, it seems a stretch to tie the extent of its R&D expenditure to an industry pivot of the sort that Cybart describes. As Apple CEO Tim Cook recently reminded, Apple continuously works on developing existing and new products, with many of the latter not necessarily translating into shipping products.
( Last edited by NewsPoster; May 13, 2016 at 02:29 PM. )
     
jwdsail
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May 13, 2016, 09:50 AM
 
Huh. At this rate, I guess I'll be the last one on the "iCar Skeptic island" pretty soon.

What I mean is, I'm still not convinced that all of this is leading to an Apple-manufactured or even Apple-branded (made by BMW, Tesla, etc?) car at all.

Apple branded (or not) in-car electronic systems, partnerships with multiple auto manufacturers for future internal systems that may or may not include "self-driving" (*spit!*) technology? In-car entertainment and navigation? Electric systems and the technology to better optimize battery usage and charging? Perhaps even visual systems similar to those Corvette Racing uses for rear-view camera tech? Sure. All of that and more.

I see this as Apple working with other automotive tech companies to develop standards in how these technologies connect and how drivers interact with them (An Apple Created Automotive Industry Standard, an Apple Human Interface Guidelines for Cars), to be a key player, designer, supplier to the industry moving forward.

This is an enterprise play. This is a 10 year -> 50 year play. Everyone reads/hears "Apple and Cars" and thinks that will be synonymous with "Apple and Watches"... Maybe they need to think more about it more in "Apple and IBM partnering on Enterprise mobility" terms?

This is a huge potential future market for Ax chips, OS X , etc. And Apple could innovate more and do more than just "build a car". I think building a car is aiming too low.

Let me put it this way. Do you think Apple wants to be the next Tucker, maybe Tesla, or do they want to be the next Bosch, Delphi, L&P, Hitachi, or even Allied Signal/Honeywell? Do they want to make maybe one in every 50 cars sold, or have their technology built into the *majority* of cars sold?

I think anyone waiting for an Apple *car* is going to have a looooooong wait.

I may be the last one here to think so... Shrug.
     
coffeetime
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May 13, 2016, 12:14 PM
 
Anything is possible with Apple. Apple's first iTunes partner is Motorola phone. It was horrible until iPhone came out. Now the history repeats itself again: partnering with car manufactures until Apple fed up with them and comes with their own car. Maybe Apple's large server farm is actually a secret car manufacture.
     
Steve Wilkinson
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May 13, 2016, 07:49 PM
 
Originally Posted by jwdsail View Post
Apple branded (or not) in-car electronic systems, partnerships with multiple auto manufacturers for future internal systems that may or may not include "self-driving" (*spit!*) technology?
I sure hope not. I hope they are either building car-type-systems or a car.

Originally Posted by jwdsail View Post
(An Apple Created Automotive Industry Standard, an Apple Human Interface Guidelines for Cars), to be a key player, designer, supplier to the industry moving forward.
I'd say yes, if they were still able to do this for computers/mobile. Unfortunately, Apple seems to have forgot (or no longer cares) about such things. Now it's about profit maximization, it seems. If they do still know how, I wish they'd apply it to their computers and phones (like they used to!).

Originally Posted by jwdsail View Post
Apple could innovate more and do more than just "build a car". I think building a car is aiming too low.
I kind of wish they would just build a car (and electronic one). We need some competition for Tesla. That said, the way things at Apple have been going lately, maybe it's better to leave such things to rocket scientists. Cars aren't a thing to be playing in for companies that can't handle QC. (That's why a Google car scares the bejebbers out of me too.)
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