Despite its reputation for being innovative, Apple is one of the least innovative in the IT business, preferring to spend its cash mountain on marketing.
According to USA Today, Apple does not make it into the top 15 innovative companies and pays out more cash on its advertising budget than it does on R&D.
The biggest spender on R&D is Microsoft, which wrote a cheque for $9.4 billion last year. To put this in perspective, the drugs company Pfizer, which came second, spent $8.4 billion.
Apple is 18th on the list, spending $2.6 billion – well below Microsoft, Intel, IBM, Cisco Systems, Oracle, Qualcomm, Hewlett-Packard and Amazon.com. In fact Apple’s R&D spending as a percentage of its revenue of $127.8 billion was a pathetic 2.6 percent.
To work out how much Apple spent on advertising and marketing, USA Today worked out it was based on a figure called SG&A which is essentially a company’s overhead, which includes executive salaries and advertising. Apple spent $8.3 billion on SG&A in 2011, which was 6.5 percent of revenue.
This might explain why the iPhone 4s and the new iPad are very similar to Apple’s previous products. Bear in mind the number of products that Apple releases are smaller in comparison to the likes of IBM and HP.