One cannot argue about Apple’s success under cook. The stock price– the all important shareholder metric– is at all time highs; revenue and profits continue to grow even though most of Apple’s products are in technology segments which are not growing. We’ve reached peak PC, peak smartphone, peak tablet, and it should be obvious that growth is in some future product.
Apple today spends more on R&D– research and development–than ever; somewhere between four and six-percent of revenue. Why would that bother Steve Jobs? What Tim Cook spends on R&D is far more than what Apple spent on R&D under Steve Jobs because Apple’s revenue, thanks to iPhone sales the past six years, has become an enormous outlier.
Clearly, all that R&D spending is going on so Apple can find the next great thing; to diversify Apple beyond just being the iPhone company (nearly 65-percent of all Apple’s revenue). Apple under Cook is spending almost ten times on R&D than it did under Steve Jobs.
What does Apple have to show for all that money?
Well, during Steve Jobs’ reign, Apple launched the iMac, Apple Store, iPod and iTunes, iTunes Music Store, moved the Mac to Intel Inside, then launched the iPhone and iPad. All on a budget less than one-tenth of what Tim Cook spends on R&D these days.
How about Apple’s new products under Tim Cook? Yes, every product line has had iterative improvements, though some of those far less frequently than under Steve Jobs. Mac mini, Mac Pro, MacBook Air, just to mention a few.
Tim Cook’s product line is more a line of accessories to iPhone than market disruptive innovations. AirPod. Apple Watch. Beats. Apple Pay and Apple Music. The Services group is growing faster than anything else Apple sells, but still remains dependent on Apple hardware sales.
In short, Steve Jobs launched multiple and massive market disrupting products on an R&D budget less than one tenth of what Tim Cook’s Apple spends today, and those massive expenditures have, 1) helped Apple’s iPhone to remain an industry leader, and made the company very rich, and, 2) helped Apple sell more accessories (Watch, AirPods, Beats, et al) and services.
Maybe all that R&D spending will result in the next great thing or two in a few years, but I can’t help but think Steve Jobs would be disappointed with a few things at Apple circa 2018. Stock buybacks? Nope. Dividends? Uh uh. Accessories? Puhleeze. Lack of the next great thing? Probably.