Has Apple stopped innovating?

Has Apple stopped innovating?

Summary: An analyst has suggested that Apple needs a new product roadmap, and soon.


Is the iPad and iPhone maker lacking direction in research and innovation?

Apple's latest 10-K filing with the U.S. Securities and Exchange Commission (SEC), documenting its expenditure for the 2012 fiscal year, said the tech giant had increased R&D spending by almost $1 billion. Bringing the firm's total research and development spending to $3.4 billion compared to $2.4 billion in 2011, Apple still lags behind rival technology firms in research. As an example, Microsoft and Google invested $9.8 billion and $5.2 billion in 2012 respectively.

Although Apple accounts for 118,500 employees worldwide, most of these employees are accounted for in the retail sector, of which the company had a total of 250 U.S. retail stores and 140 international retail stores -- with another 30 - 35 openings in the works for next year.

Within retail and consumer technology, there is no denying that Apple is currently a very popular technology firm. However, Global Equities Research analyst Trip Chowdhry is not so certain that the trend can continue, as Apple has stopped innovating.

According to the Wall Street Cheat Sheet, the industry analyst wrote in a note to clients:

"Apple's innovation is sputtering. Why is that Apple, the company that brought touch to phones and tablets, stopped just there and did not bring touch to notebooks and iMacs? Why is it that Apple brought high-resolution screens to... some MacBooks and not to all devices? High-resolution screens are a commodity today."

High-resolution screens may be a commodity, but they are also a more expensive option for consumers. The analyst may believe that developing touch technology or retina displays means that these features should be spread across the board, but from a business perspective, immediately upgrading every product to a more expensive counterpart could result in alienating customers with less to spend.

In addition, the analyst has suggested that Apple may be rushing products -- and due to this, is lacking a viable product roadmap. Going further, Chowdry hinted this may have contributed to Scott Forstall leaving the firm. The analyst wrote:

"Our contacts speculate that Apple executive leadership may have rushed Scott Forstall to deliver products prematurely. This may also indicate that Apple may be lacking a three- to four-year product road map, because if a roadmap existed, engineers would not be pushed to ship products prematurely -- especially when they are not fully tested."

Apple's attempt at a Google rival iOS Maps, issues with the iPhone 4's antenna and the iPhone 4S's battery problems come to mind -- but the iPad and iPhone maker is hardly the only firm that sometimes releases products with unforeseen hardware issues. It doesn't make business sense to release sub-par products to an adoring public, as the problems do nothing more than anger customers or turn future business away -- so the speed-bumps in  product development are unlikely to be premeditated. 

However, if the firm is only spending a marginal amount on research and development, it may be within the tech giant's best interests to boost this investment in the following years. This would not only result in staying on top of consumer trends and maintaining the company's innovative reputation and competitive edge, but could prevent "rushed" product offerings and keep hardware issues to a minimum.

Topic: Apple

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  • tim cook

    Why should Apple innovate if litigations are far more lucrative business strategy ?
  • Did Apple ever innovate?

    It's highly debatable whether Apple has contributed more innovation than imitation.

    "Apple's innovation is sputtering. Why is that Apple, the company that brought touch to phones and tablets, stopped just there..."

    Apple did NOT invent touch and were NOT first to introduce it to mobile devices. Apple is cloaked in a force-field of untrue popular misconceptions casting the corporation in a much better light than it deserves.
    Tim Acheson
    • Re: It's highly debatable whether Apple has contributed more innovation tha

      Innovation and imitation are not mutually exclusive; the former builds on the latter. Competition comes from doing the same sort of thing as the other guy, but doing it better.

      The day you forget this, and start getting an inflated importance of your own self-worth, is the day you become a loser.
    • You are using a narrow definition of innovation

      You are basically right that Apple has not really had any new ideas to offer during their recent meteoric rise to success. Much of what they did was undoubtedly just high quality marketing.

      But what I think you are wrong about is saying that isn't innovation. No, Apple was not a touch pioneer and the iPhone has really never had features other phones didn't have (and often better). But the iPhone was a "package" that, holistically, other phones weren't. And apple turned the iPhone, an ugly device, with an ugly OS, that was technologically inferior to it's contemporaries, into a cool gadget to have. The combination of a holistic (even if crippled) experience and great marketing was something Apple executed much, much better than any of their rivals. And being better at something implies that you have innovated in some way.
      x I'm tc
    • Re: Did Apple ever innovate?

      Nonsense from a hater. Remember cell phones before the iPhone? Remember tablets before the iPad?
      Adam C Hall
  • however,

    What Apple has done is take other company's ideas, greatly improved them into user-friendly products.combine that with unrivaled customer service, if one is fortunate enough to live in an area with an Apple store especially, and the computer experience improves greatly.
    I don't want devices I must "root" or perform other steps before using, I want to buy the product and use it.
    In addition, my iMac was out of warranty, but they recalled due to a hard drive issue. Several other hardware issues developed while they were repairing, and as they began replacing parts, they changed, and will replace the entire iMac. Since the model is out of production, I'll be getting the new 21".
    I don't believe another company would go to such lengths, do you?
    PS: touch screen iMacs and Retina are on the way.
  • Why innovate

    5 Millions iPone 5 sold the first weekend with crappy maps, no NFC, Smallest screen in price segment, no major camera improvements... etc...

    Now tell the Apple Board of Directors again why they should innovate. You know that people will line up no matter how good the Product is, as long as its the latest...
  • R&D is not equal to Innovation

    Nokia spent scads of cash on research and development last year, but didn’t see much return on it. Certainly, the investment did little to slow the continuing deterioration of its competitive position. The company’s R&D spend for 2010 on mobile was $3.9 billion–almost three times the average of its rivals’, according to a Bernstein Research estimate. And for what? Symbian^3 and the troubled N8? According to Bernstein’s estimate, about a third of Nokia’s R&D spend went to Symbian.

    Source: http://allthingsd.com/20110203/not-seeing-much-return-on-that-massive-rd-spend-are-you-nokia/
  • Minimal Product Line

    Other companies (ex: Samsung, Moto) will launch multiple devices mitigating issues with any single device. Smart tactics.
    Apple minimizes device diversity so any failure in this arena has a significant impact.
    Why folks still buy these "buggy" devices is a mystery.
    • What buggy device are you referring to?

      What buggy device are you referring to? I've switched to a complete Apple product tech lineup and do not see any bugginess, at all. In fact, the amount of time/money I spend on fixing/repairing/tweeking my hardware and software has dropped dramatically since I switched.
  • Do Your Homework Before Writing An Article

    A true indicator of a companies innovations are the patents the company submits and gets approved. Apple continuously patents innovations. These ideas take some time to make practical and refine. Apple is working on ideas it hasn't released on any of its products. It aggressively protects these ideas, that's for sure.

    Product defects and bugs happen with every product, some more noticeable than others. The Android world has there share. Forestall, was asked to resign because he underestimated the effort it would take to engineer a mapping system of Apples own, after selling the idea that it could be done to the folks he reported to.

    In all fairness, Android innovations are patented as well, and there ideas are held back until practical. The Android world has great products and give Apple a run for their money, no question about that. The Apple experience including the "look and feel" is what people buy and will continue to buy in very large numbers. The pace of what innovations are released in their final products sometimes may give a false indication that a any given company is not innovating. Innovations are part of the experience and give products their edge. Apple hasn't forgotten about that, there are, and will continue to innovate.
  • Really?

    They never started to innovate.
    • Other way around

      Apple has innovated - the definition involves taking an established idea and modifying it.

      The problems are, Apple has:
      (a) never created
      (b) patents what others created so nobody else can do what they do

      it's hard to be "innovative", much less be "competitive", when one entity owns all the patents and uses them to get rid of anyone trying to build a mousetrap, better or otherwise. And that's when words like "vulture", "jackal", "predatory", the antithesis of "ethics", and all sorts of others come into play...
      • oops

        "patented", not "patents", regarding point (b). Apple patented what others created, so nobody else could do the same thing Apple got away with.

        Either way, all it does is make Apple look slimy. Not the actions of an evolved entity in a first world country.
  • Superficial and Laughable

    Apple is the most innovative company in the world, and has been for 30 years. They revolutionized computer hardware with the Apple II, and almost single-handedly created the personal computer market. They revolutionized the user interface for personal computers (Gates has admitted copying it). They revolutionized publishing and graphics processing. They revolutionized mobile music and the whole music delivery business. They revolutionized the phone industry. They overturned the portable computer models – when the industry was making netbooks, Apple made the MacBook Air, and Intel hammered on manufacturers for years to make competitors. And they revolutionized the tablet market and mobile computing. The Google Chrome browser and OS are based on WebOS, which Apple developed and put in the public domain. And they've quietly revolutionized design and manufacturing, pushing for ever higher tolerances, integrated functions, new display technologies, newer tougher glasses, better battery performance, etc. They do their chip design in house, producing performance improvements others have difficulty matching using conventional components. Everybody else copies what Apple does; they're the developer for the entire mobile computer industry. As Tim Cook put it, "We just want [our competitors] to design their own stuff."

    During this amazing run, did they ever spend 8-10% of revenue on R&D? With their record, increasing *classifiable* R&D spending 50% YoY isn't enough? Apple's entire raison d'etre is innovation. Why try to apply conventional thinking to an unconventional company?
    • Ironic,

      given the double standards Apple wants to be innocent of, while damning others that have done the same things it has.

      That's what it boils down to.

      Apple's antics, down to lobbyists and patent trolling, make them as unconventional as a gaggle of skunks caught in a shed.
  • R&D Spending.

    If you think that innovation is a function of R&D spend, then there should be some evidence of that. What is MS getting for their $9.8B exactly?

    Apple's innovation has never been in original invention; hardly any inventors have ever been good at turning their ideas into successful products. Apple has always taken leading edge (expensive) technologies, and made them mainstream in beautiful products actual people love to use.
    • That sounded more like a commercial...

      And yet Apple gleefully patents the work others created. Surely you don't find a conflict of ethical interest in that?

      And people love it because of the PERCEPTION of what they get under the cover. Otherwise they're told/yelled at with "YOU'RE HOLDING IT WRONG", or that they broke it which is why it gets so hot...

      It might be beautiful on the surface, but Apple can be mighty ugly underneath at times...
  • When did it start?

    They did to Xerox what Samsung did to Apple...

    touch screens, mp3 players, app stores, et al, all existed beforehand...

    Innovating is doing something different with established paradigms, so Apple hasn't stopped.

    I want to believe the article is talking about "creating", but Apple hasn't exactly done that...

    But, once Apple's Macs move to ARM processors, the walled garden will be that much higher... why innovate when lock-in is more profitable? (Now think SaaS providers...)
    • Nice revisionist history...

      ... did you major in historical rewrites in college or is it a natural talent.