Apple, one of the biggest software and hardware companies in the world, is spending money to expand even further. That’s right, in the last quarter alone, the group spent $4.2 billion on research, development, and more, we’ve learned from its earnings report, according to CNBC.
This number cost around 7.9% of its overall revenue, the highest the company has ever spent to research new developments since 2003. At that time, Apple was working to develop iPods and Macs. On top of this, the group is working to spend over $16 billion on this research in 2019 as a whole.
Apple is working to improve its offerings after the sales of its iPhone are dropping. In fact, the publication reports that revenue from iPhones fell a whole 12% year-over-year. On top of this, the company is likely planning to build new devices that will increase sales and bring excitement to the world again. Of course, this is an expensive investment to make.
Reportedly, Apple is behind other companies when it comes to sales spending as well, falling below competitors like Microsoft and Google. The former spends around 13.4% and the latter puts 15.7% towards its research and development sectors.
Analysts have looked at Apple’s higher costs as well when it comes to research and development. On top of this, CFO of Apple Luca Maestri was asked by analysts if they plan to spend more on investments. Maestri responded:
“We want to improve the user experience and differentiate our products and services in the marketplace. So, we will continue to do that. There are some types of investments, of course, that are very strategic for us and they will have long-term implications.”
The CFO also spoke on Apple’s $1 billion buy of the modem division of Intel, bringing in an additional 2,000 employees and making its own record for the most employees brought over via an acquisition.
“You’ve seen the announcement that we made around the Intel acquisition. Very important strategically for us. It requires upfront investment, of course,” Maestri said.
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