Greg's bite: the secret to Apple's lower R&D budget is focus
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Greg's bite: the secret to Apple's lower R&D budget is focus

By Greg Mills

As an inventor and R&D guy myself, it comes as no surprise to me that Apple is spending far less for its research than it's competitors. We ran an article yesterday with numbers that
put Apple's R&D expenditures at one-seventh that of Microsoft with similar market caps between the companies.  

Look at what is coming out of the two companies and you wonder how Microsoft is blowing so much money. The truth is that Apple is just innovating better at a low cost, not that Microsoft is wasting so much more than typical companies their size.

The difference between the two  companies is like comparing the Zune to iPod touch. The conventional method of R&D is to put a rough product idea before the brain trust and ask them to do it better. The problem for Microsoft in competing with Apple is that by the time Microsoft identifies the next big thing, Apple has already done it so well it is hard to improve. By the time you have the  improved version ready for market, Apple release their next version and suddenly there is nothing left to wow the market. After all these years, who wants to buy a Zune? Sort of like comparing a BMW to a Yugo.

The reason Apple is so careful to keep new products under wrap is not as much the advertising punch, which is considerable, but mainly to keep the competition guessing as long as possible. Why let the cat out of the bag early and have your announced product labeled vaporware, anyway? In time everything is copied and some people are willing to buy the knockoff Rolex -- or iPhone.

Within days of the iPad launch a number of competitors slate computers were scrapped before they were even launched. Apple had set the bar so high and at such a competitive price there was no reason to lose money introducing second rate junk.  

Some people can't think of anything new themselves.  Some people can't think of anything new themselves, but know it when they see it. And some people not only can't think of anything new themselves and don't understand what is so profound when they see -- they poo poo the idea. Remember when Steve Balmer mocked the iPhone?  "Can't compete with our Microsoft mobile OS," he said.
  
Once a new product gains a strong market share, some people want to copy the concept and make some of the money that is the rightfully due the innovators. That is where patents are supposed to come in.   bet there are as many lawyers on staff at Apple as there are R&D staffers.  The patent situation also requires secrecy; in many countries now, the first to file is the one who get the patent, no matter  who actually invented the device.  

Apple's secret comes down to one word: focus. If nothing else Steve Jobs demands focus on the details and user experience. Elegance flows from both the design tastes and industrial design and the no-nonsense, absolute authority of Jobs.  You have to know there are a lot of ideas under consideration at Apple that will never be released. Apple has the ability to refocus staff on what is next to be launched.     

I think the next big thing will be TV content related ...  perhaps using the new server farm Apple is building. The Apple TV is too lame to continue but has not been scrapped. Let's see what "one last thing" Steve. Jobs has up his sleeve this time.

Greg Mills does faux wall art (http://www.gregmills.info) and runs Cottage Industry Solar Shops (http://www.cottageindustrysolar.com).

 

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