RIM (RIMM), Nokia (NOK) Need to Take Apple's (AAPL) Simplistic Approach
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Price: $165.03 -1.2%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.1%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: -4.1%
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Apple Inc. (NASDAQ: AAPL) has created a tech empire over the last decade, through innovation and products consumers are now unable to live without.
Surprisingly, Apple has accomplished this despite spending less on research and development over the last ten years than Microsoft Corp. (NASDAQ: MSFT) did last year alone, according to a report from the Wall Street Journal's Martin Peers on Wednesday.
Apple spent about 2.7 percent of annual sales on R&D last year, down from previous years. Over the past decade, Apple has developed iconic products like the iPod, iPhone and iPad while spending just $8.5 billion on R&D.
Conversely, R&D costs at rival Research In Motion (NASDAQ: RIMM) have tripled in the last three years to $1.35 billion. RIM spent 6.8 percent of sales in the most recent fiscal year, rising from 5.9 percent previously after dropping from 7.5 percent in mid-2000s.
Despite the spending spree, RIM's share of global smartphone market dropped from 19.7 percent last year to 16.3 percent in 2011. RIM's BlackBerry devices have been eclipsed by the Apple iPhone and the myriad smartphones running the Google Inc. (NASDAQ: GOOG) Android platform.
RIM is planning to launch its new operating system on the forthcoming PlayBook tablet, but this OS was not an internal development -- rather a product of an acquisition.
This same trend is being seen at Nokia Corp. (NYSE: NOK), which ratcheted up R&D spending to 14.4 percent of sales in 2009 from 9.5 percent in 2006 in order to stem the tide of its once-overwhelming global market share.
The Finnish-handset maker had worked for years on an internal operating system before waving the white flag and bringing on Microsoft's Windows Phone 7 earlier this year.
Microsoft is also getting used to the smell of burning money, spending 14-15 percent of sales on R&D in fiscal 2010. Recently, the Steve Ballmer-led Microsoft has produced commercial turkeys such as Windows Vista and the Zune music player.
It seems Apple's simplistic view is the way to grow in the technology sector. Instead of spending billions on trying to duplicate products so entrenched in consumer culture, RIM, Nokia, Microsoft and the like may need to take a step back and focus on what made them titans of tech in the first place.
Surprisingly, Apple has accomplished this despite spending less on research and development over the last ten years than Microsoft Corp. (NASDAQ: MSFT) did last year alone, according to a report from the Wall Street Journal's Martin Peers on Wednesday.
Apple spent about 2.7 percent of annual sales on R&D last year, down from previous years. Over the past decade, Apple has developed iconic products like the iPod, iPhone and iPad while spending just $8.5 billion on R&D.
Conversely, R&D costs at rival Research In Motion (NASDAQ: RIMM) have tripled in the last three years to $1.35 billion. RIM spent 6.8 percent of sales in the most recent fiscal year, rising from 5.9 percent previously after dropping from 7.5 percent in mid-2000s.
Despite the spending spree, RIM's share of global smartphone market dropped from 19.7 percent last year to 16.3 percent in 2011. RIM's BlackBerry devices have been eclipsed by the Apple iPhone and the myriad smartphones running the Google Inc. (NASDAQ: GOOG) Android platform.
RIM is planning to launch its new operating system on the forthcoming PlayBook tablet, but this OS was not an internal development -- rather a product of an acquisition.
This same trend is being seen at Nokia Corp. (NYSE: NOK), which ratcheted up R&D spending to 14.4 percent of sales in 2009 from 9.5 percent in 2006 in order to stem the tide of its once-overwhelming global market share.
The Finnish-handset maker had worked for years on an internal operating system before waving the white flag and bringing on Microsoft's Windows Phone 7 earlier this year.
Microsoft is also getting used to the smell of burning money, spending 14-15 percent of sales on R&D in fiscal 2010. Recently, the Steve Ballmer-led Microsoft has produced commercial turkeys such as Windows Vista and the Zune music player.
It seems Apple's simplistic view is the way to grow in the technology sector. Instead of spending billions on trying to duplicate products so entrenched in consumer culture, RIM, Nokia, Microsoft and the like may need to take a step back and focus on what made them titans of tech in the first place.
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