Monday, February 27, 2012

R&D


As mentioned in my previous post, Apple spends a huge amount on R&D, 2011 they spent $575 million, and in 2012 so far they have spend over $750 million! While this is a huge amount of money, in terms of percentage of sales (total sales $46.3 million), it is nothing. In the past 5 years, the average percentage of sales spent on R&D is 2.8%. The funny thing about this I find is that Microsoft have spent $2.3 Billion in the same past quarter, and over the past 5 yeas have spent 13.8% of sales on R&D. When you think about this and think about which company has brought out more products, or products that literally change the world, you really have to think, what is Microsoft spending all their money on… or, how is Apple just that successful!!

Steve Jobs was an incredible marketer and advertiser. What he did was unlike anyone had done before; he truly was an advertising genius. As stated in the clip, http://www.youtube.com/watch?v=M-vZtSfqwlk, Jobs was able to make Apples products “seem tantalising, like you had to have it” it was almost portrayed as a “social obligation” to have the latest Apple product.
Basically, the other big companies such as Microsoft, Nokia, Google, Sony Ericsson etc all spend a lot of money on innovation, but only occasionally come up with something new and interesting. Jobs, insisted on maintaining a startup mentality within Apple, (even with 30,000+ corporate employees) and this combined with a focus on only a few projects at a time means Apple can spend less on R&D and get much more for its investment.

Through their R&D Apple has created some of the most technologically advanced products in the consumer electronics/computer software industry. These innovative products though have not come out of the blue; Apple understands that happy employees are more likely to work toward bettering their organisation. It is a incredibly collaborative company, it has zero committees, they are organised – as mentioned above – like a startup, one person is in charge of iPhone OS software, one in charge of Mac Hardware, one person is in charge of World wide marketing, etc. “We are the biggest startup on the planet” (Steve Jobs himself in the interview http://www.youtube.com/watch?v=f60dheI4ARg&feature=related)
There is a huge amount of teamwork at the top of the company that filters down to the rest of the company. Jobs spent his days meeting with these different groups, and discussing what can be done to improve things, new ideas etc. “You have to be run by ideas, not hierarchy”.

Truly unlike any other company, Jobs was well ahead of his time, and it has been incredible to live through it all, and it is truly exciting to think about what more is in the pipeline in the world of Apple and their incredible innovation. The fact a company can bring out something so different to what is already in the market, and in a matter of no time at all make the consumer feel as though they have been left out if they don’t have it, is truly remarkable.

Next blog will focus predominantly on Apples unique Advertising efforts. Stay tuned!









No comments:

Post a Comment