Apple's R&D costs grew in 2021 compared to previous fiscal

2021 has proved to be a wonderful year for Apple Inc.

The base of active installed Apple devices has grown past 1.65 billion, which includes 1 billion iPhones.

Apart from that, the company is also enjoying solid growth in revenue and profits in the latest fiscal.

Known to be one of the most innovative brands in the tech industry and the largest brand globally, based on market capitalization (with a market cap of around $2.45 Trillion), Apple has also grown its investment in research and development to fuel faster innovation.

Despite being the largest company, Apple is not the leading R&D spender. Amazon holds the position of the largest R&D spender globally. 

During the first three quarters of 2021, Apple has experienced solid growth in revenues, driven by higher sales of iPhone 12 models.

The kind of popularity the iPhone 12 model achieved was previously achieved by iPhone 6 only.

Within 7 months since its release, iPhone 12 had sold more than 100 million units. Its sales in China were especially very impressive where the company enjoyed 57% growth in sales of iPhones.

The smartphone industry has grown highly competitive.

However, Apple is enjoying higher brand loyalty than ever. While one of the main reasons behind the growing popularity of Apple products and services globally is its focus on customer experience, the other is its focus on innovation.

Since the time of Steve Jobs, the company’s focus was on investing each R&D dollar carefully. Right from its earlier years, the company was able to derive much more from its R&D investment compared to companies that were spending its ten times on innovation.

From 2019 to 2020, the company increased its spending on research and development by a little more than 15%. Its R&D spending over the first three quarters of 2021 is nearly equal to what the company spent on research and development during the entire fiscal 2019.

Take a look at the tables below to compare how much Apple spent each quarter on R&D during these three years. (sums are in millions)

R&D Expenses201920202021
Q1$3,902$4,451$5,163
Q2$3,948$4,565$5,262
Q3$4,257$4,758$5,717
Q4$4,110$4,978 
Total$16,217$18,752$16,142

Apple’s research and development expenses for 2021 are expected to remain around $22 billion or more than 15% higher compared to the previous year.