Apple Spends More on Marketing than R&D

March 21, 2012, By Sanjeev Ramachandran

Apple may be a success maker in terms of market sales and is known for their innovations in bringing out products right out of the box.

However, an interesting comparison reveals that they are spending fewer bucks on their Research and Development activities than rivals, but more on marketing.

When the R & D expenditure among top innovative companies was compared, Apple was found at an 18th place while Microsoft topped the list.  Microsoft spent a massive $9.4 billion last year for their R&D efforts, while Pfizer, the drug making company,  is just behind MS with $8.4 billion spent on R&D during the same period.

Other tech players are also far better than Apple, in their expenditure for R&D. IBM has wrote a $ 6.3 billion check last year for research while for Google it was $5.2 billion.

Apple was behind all these names, including Oracle, Cisco systems, Qualcomm, HP and even Amazon at the 18th position, with a mere $2.6 billion spent on research initiatives.

The difference is huge when the amount spent by each company is compared to their revenue. That way, Apple is spending just 2.6 percent of its massive $127.8 billion revenue for innovative research.

Their marketing expenditure, including executive salaries and ad expenditure was $8.3 billion last year which is 6.5 percent of their revenue.

Does that enforce the argument that Apple products and services are actually plain hollow marketing hypes?

We don’t know. But considering the fact that an entity like IBM has a varied range of products and they usually go for more product launches than Apple, may justify the huge gap.

However, the meager R&D spending can be one reason why Apple comes with device upgrades which are nominally different from their predecessors. Do you agree with that?

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