Apple's R&D Efficiency

In fact it’s rumored that Apple brought the iPhone to market for a mere $150 million, doing so organically without acquisition outside of a touch gesture recognition company named FingerWorks.

This begs the question: how in the world did Apple grow the iPhone platform organically from zero into the most profitable cell phone business in the world with so little investment?

via Apple’s Incredible Efficient Growth.

Apple has always spent below the industry average for R&D.

Here are Apple’s trailing 9 quarters R&D as percent of sales:

3.42% 3.86% 2.59% 2.65% 3.51% 3.50% 2.93% 2.54% 3.16%

Nokia spends at least 10% of sales on R&D and Microsoft at least that much.

But these numbers are not as spectacular as the comment above that iPhone development cost was $150 million.  To date, the product has generated $31.4B in sales.

As the article points out, Apple spent $4.6B on R&D over the past four years and Microsoft spent 7x that or $31 billion. Cisco and Intel spent 4x.