The Cost of Innovation: Apple Data Lights the Path for Search Vendors and Their Research Costs

February 13, 2014

I have an iPod and an iPad kicking around. We even have a Mac computer. My wife has an iPhone. The gizmo provides her iPhone equipped friends with myriad opportunities to look at baby pictures, check lunch dates on their calendars, and make phone calls. None of the gizmos is without flaws. The Apple product line up is premium priced and designed to meet the perceived needs of semi-affluent or pretend-affluent customers.

I read “A Look at Apple’s R&D Expenditures from 1995-2013.” I urge you to read the story but the main point is the diagram showing Apple’s spending for research and development. I translate “research and development” to “innovation” but you may have a different way to define the phrase. I have snipped a small segment of the chart to illustrate what has happened to Apple, based on the data presented in the write up.

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Look at that ramp up. What is fascinating is that the scale in 2013 noses into the $4 billion range. The take away is that the amount of money Apple is spending is rising pretty quickly. Apple has money in the bank and some products that continue to sell well.

Apple is able to invest increasing amounts of money in innovation because it has money.

Search vendors face innovation problems. The chatter on LinkedIn and in the write ups for conferences that flood my email talk around innovation. The discussion pivots on some well worn themes, only tangentially related to information retrieval.

Innovation in search has stalled. Apple is spending aggressively to help ensure its innovation flow.

But what happens when a search vendor with far less money has to innovate. DARPA will award a handful of contracts. Venture funding sources will want a pay off.

The net net is that the cost of innovation in search is not that different in its need for financial investment. Apple can write the checks. Most search vendors—despite the flashy webinars and mindless news releases—cannot.

Stephen E Arnold

Comments

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