Taking a look at Apple's recently filed Form 8-K, we see that the amount of money Apple spent on R&D this past quarter was up 36% compared to the same quarter a year ago. Indeed, Apple during the June quarter spent more on R&D than it's ever spent in any other quarter in company history. Specifically, R&D costs this past quarter came in at $1.6 billion.
Now what's even more interesting is that Apple's R&D expenditures over the past three months represent 4.2% of the company's net sales for the quarter. Analyst Walter Piecyk tweeted out yesterday that the last time Apple's R&D as a percentage of net sales topped 4% was before the first iPhone launched.
$AAPL R&D was over 4% of revenue. It hasn't been that high since 2006, before the first iPhone launched.- Walter Piecyk (@WaltBTIG) July 22, 2014
Indeed, a few months ago I put together the following chart mapping out Apple's R&D expenditures as a percentage of net sales. True to form, 2006 was the last year that number hit 4%.
Without question, Apple certainly has some big plans ahead. The company, with increasing frequency, has mentioned new products coming down the pipeline, with Eddy Cue even going so far as to say that Apple's 2014 product pipeline is the most exciting he's seen in his 25 years at Apple. For someone who was around for the iPhone launch, that's quite a tantalizing remark.
What's more, Tim Cook earlier this year told the Wall Street Journal that isn't just working on new products, but new product categories altogether.
There will be new categories. We're not ready to talk about it, but we're working on some really great stuff," Mr. Cook said. When asked whether a new product category could mean an improvement on an existing product like an iPad Air, a lighter version of its tablet computer, or new services such as mobile payments, Mr. Cook declined to comment.
He said that anyone "reasonable" would consider what Apple is working on as new categories.
Lastly, when Tim Cook and IBM CEO Virginia Rometty sat down for an interview with CNBC last week, Cook was asked about Cue's statement regarding Apple's product pipeline being the best in 25 years.
"I'd agree with Eddy. I totally agree with him."
Of course, it's not like Cook was in a position to disagree with Cue's statement, but still, it's starting to look like the fall of 2014 may very well be Apple's most exciting quarter in quite some time.