Apple Ramps Up R&D Intensity to Pre-iPhone Levels

Ahead of the launch of Apple Vision Pro, which becomes available for pre-order on January 19, Apple ramped up its R&D spending quite significantly. In fiscal 2023, which ended September 30, the company spend $29.9 billion on research and development, bringing its R&D intensity, i.e. R&D spending as a percentage of sales, to levels last seen before the iPhone launch in the early 2000s. Since fiscal 2020, Apple's research and development spending has increased by more than $10 billion, as work on the company's supposedly groundbreaking XR headset and its transition to Apple silicon took up a lot of capital.

When asked about the steep increase in R&D spending over the past two years, Apple CEO Tim Cook put it down to "a number of things": things he couldn't talk about, the Vision Pro, AI, machine learning and investments in Apple silicon. He also pointed out that Apple's R&D expenditure was "very competitive" compared to others, while CFO Luca Maestri added that the company's aggressive R&D spending is one of the drivers behind its gross margin expansion, meaning that it partly pays for itself, so to speak.