research and development
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Bipartisan Senate bill aims to invest $100 billion in technology R&D
The Endless Frontiers Act would invest $100 billion in AI, high-performance computing, robotics, automation and more.
Samsung invests in logic chip R&D to take on Qualcomm and TSMC
Samsung's chip division is its most lucrative, but memory chip prices are falling and the company's overall operating profits are slipping. In response, Samsung just announced a $116 billion investment in non-memory chip R&D and production infrastructure. Some see that as a move to sell chips to other companies and take on competitors like Qualcomm, Intel and Taiwan Semiconductor Manufacturing Co Ltd (TSMC).
Microsoft reorganizes to create a dedicated AI division
Microsoft has reorganized several disparate projects and programs into an entirely new Artificial Intelligence group. It will be the fourth major division after Windows, Office and cloud, reallocating over 5,000 computer scientists and engineers under its umbrella. The shift shows how much unified effort the tech giant believes the field needs, as well as internally standardized AI tech they can more easily integrate into customer products.
Apple R&D spending reached record levels last quarter
To say that Apple had a stellar holiday quarter would be an understatement. For the quarter gone by, Apple recorded just over $18 billion in profits, enough to make it the most profitable quarter in corporate history. But lest anyone think Apple is easing up on the throttle, the company remains as committed to innovative endeavors as ever. Case in point: the company during its most recent quarter spent more on research and development (R&D) than ever before. In their quarterly earnings report, Apple relayed that it spent $1.895 billion on R&D, up from $1.3 billion during the same quarter a year-ago. Apple's previous high for R&D expenses clocked in at $1.6 billion during the company's June quarter. Of the uptick in R&D spending this past quarter, Apple writes: The growth in R&D expense during the first quarter of 2015 compared to the first quarter of 2014 was driven primarily by an increase in headcount and related expenses, including share-based compensation costs, and machinery and equipment to support expanded R&D activities. The Company continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and enhanced products that are central to the Company's core business strategy. As such, the Company expects to make further investments in R&D to remain competitive. As we detailed earlier this week, just because Apple doesn't hold flashy press conferences to detail the crazy new prototypes they're working with, it doesn't mean they're not innovating or that they're "boring." via AppleInsider
Apple to open advanced R&D center in Yokohama, Japan
Apple today announced that it will open a research facility in Yokohama, Japan. The announcement follows a campaign speech by Japanese Prime Minister Shinzo Abe in which he noted that Apple planned to "conduct the most advanced research and development in Japan." Abe linked Apple's planned investment to the success of his economic revival policy, commonly referred to as Abenomics. By weakening the Japanese yen, the country has become more attractive to foreign investors. With typical political hyperbole, Abe described the proposed Apple facility as "among the largest in Asia," while Apple's statement noted that "We're excited to expand our operations in Japan with a new technical development center in Yokohama which will create dozens of new jobs." Apple products are very popular in Japan, with the iPhone grabbing a 48 percent share of the country's smartphone market in October according to numbers from research firm Kantar Group.
Perfect World reorganizes its R&D branches
Chinese gaming giant Perfect World Co. has issued a statement declaring a restructuring of research and development teams and the subsequent formation of five new subsidiaries. Says the press release, The structure of forming new subsidiaries that are majority-owned by Perfect World is aimed to help attract and motivate top talent by granting them direct stake in the subsidiaries under the new incentive scheme. Perfect World will support these subsidiaries with the Company's proprietary technology, graphic design, integrated platform, distribution channels and other valuable resources. The Company believes that the new structure will help invigorate the game development process, support game design flexibility, allow faster reaction to changing market trends, and boost game development productivity. Through its subsidiary Perfect Online Holding Limited, Perfect World also recently acquired a 3% stake in Digital Extremes Ltd., which publishes Warframe. Perfect World Co., Ltd., is not to be conflated with Perfect World Entertainment, known to our audience primarily for its custodianship of Cryptic's Star Trek Online, Neverwinter, and Champions Online. PWE is Perfect World Co.'s North American online games publisher.
Apple last year spent a record $6 billion on Research and Development costs
Apple this week filed its 2014 10-K annual report with the SEC, offering investors a comprehensive look into the company's operations over the last 12 months. One of the more interesting items revealed on the 10-K is that Apple over the past year spent US$6 billion on Research and Development costs. The $6 billion figure is far and away the highest amount Apple has ever spent on R&D. By way of comparison, Apple spent $4.5 billion and $3.38 billion on R&D costs in 2013 and 2012, respectively. So in just two years time, Apple's R&D budget increased by an astounding 78%. Apple's 10-K reads in part: The year-over-year growth in 2014 and 2013 R&D expense was driven primarily by an increase in headcount and related expenses, including share-based compensation costs and machinery and equipment to support expanded R&D activities. The Company continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and enhanced products that are central to the Company's core business strategy. As such, the Company expects to make further investments in R&D to remain competitive.
Apple spent a record amount on R&D last quarter
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. Cook's response? "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.
One year in, and Google's crazy internet-by-balloon project is doing just fine
Even we laughed a little when Google X announced Project Loon -- an ambitious experiment built to give rural areas balloon-powered Internet access -- but one year later, the company may have proven its point: this could work. Since the project was announced last June, the company has made huge strides in balloon flight time and connectivity. Wired reports that Google's latest floating hotspots have been given LTE capabilities, freeing them from the range limitations the original WiFi-based designed burdened them with. These new radios offer better transfer speeds, too -- as high as 22 MB/s to an antenna or 5 MB/s to a phone. More importantly, the balloons are staying aloft for much longer: earlier this year, one test circled the globe three times before dropping to the ground, and another has been floating for over 100 days - and it's still up there.
How Google's internet-balloon idea got off the ground
On paper, the notion of balloon-provided internet sounds more than a little ridiculous, but that's just how Google X rolls. Mountain View's far-off research division has recently spilled (some of) its guts to Fast Company, detailing the process for bringing something like Project Loon from concept to reality. To start, every X project must address a problem that affects possibly billions of people and it has to use a radical solution that resembles sci-fi to do so. Oh, and it needs to utilize tech that's "very nearly" obtainable, if it already isn't available, too.
CCP is 'reviewing the status' of the World of Darkness IP
In the aftermath of World of Darkness' cancellation and the layoffs at its Atlanta studio, CCP said that it is taking time to "review" the White Wolf IP. "We believe that the World of Darkness IP is very valuable and will be reviewing the status of it in the coming weeks and months, but we have no specific plans under consideration at this time," a CCP spokesperson said to CVG. In the search to understand why World of Darkness got shuttered, players might turn to last December's financials for CCP. In these, the studio lodged a loss of $21 million for the year despite increasing revenue year-over-year. This was mostly due to a "massively increased R&D budget" that was feeding into projects such as WoD.
Capcom investing around $80m into two new R&D buildings
Capcom announced it's spending approximately 8 billion yen, which converts to just under $79 million, on two new research and development buildings located near its head office in Osaka. The investment is part of Capcom's ongoing focus to make more of its development internal and centralized with the aim of making higher quality games at lower costs. Work on the smaller eight-floor building began in May 2013, shortly after Capcom announced a $73 million special loss on game cancellations following what the Japanese company called an "excessive" outsourcing of projects overseas. The two buildings will house a significant number of the 1000 further employees Capcom is bringing in as part of its 10-year plan to increase its workforce, and the aim remains to amass a total staff of 2,500 by 2022. Today the company noted the majority of these hires will be recent graduates. "Capcom believes that these actions will give the company a competitive advantage due to the more powerful development capabilities in the rapidly growing mobile and PC online games markets," the company summarized in today's announcement. The 8-floor building will cost around 2.5 billion yen ($24.5 million) to build, and Capcom expects to complete construction in January 2015. Work on Its larger 16-floor sibling begins this month, with total costs of approximately 5.5 billion yen ($54 million) and a planned ETA of January 2016. As for what you'll find in the two new offices, Capcom notes a (probably very fancy) sound effect studio, a new motion capture room, and "multi-purpose" spaces that can hold 100-plus people. [Image: Capcom]
A look at Apple's R&D expenditures from 1995-2013
For a company that makes as much money as Apple, you might be surprised to learn that it spends far less on Research and Development (R&D) than many of its competitors, including bigwigs like Google, Microsoft and Samsung. That's not to say Apple isn't keen on R&D. On the contrary, Apple openly acknowledges in nearly every SEC filing that continued investment in R&D is critical to the company's ability to compete and the future "development and sale of innovative products and technologies." With Apple's 2013 books officially closed, I took a comprehensive look at Apple's Form-K filings with the SEC in order to get a crisper picture as to how Apple's R&D expenditures have changed over the last 19 years. As a point of reference, Apple in 2013 spent US$4.5 billion on R&D initiatives, a figure that Apple says was "driven by an increase in headcount." Below is a chart mapping out Apple's R&D expenditures from 1995 through 2013. One of the more interesting data points from this chart is that the company's R&D costs took a noticeable plunge following Steve Jobs' return to Apple. This is without question the result of Jobs' effort to streamline Apple's entire product line and refocus the company's energies and efforts on just a few core products. Of course, in the process, some beloved products like the Newton were shown the door. Hardly a secret, Apple's 1999 Form 10-K filing with the SEC references this point quite explicitly: The declines in total expenditures for research and development in 1999 and 1998 as compared to 1997 were principally due to restructuring actions taken by the Company intended to focus the Company's research and development efforts on those projects perceived as critical to the Company's future success. Over the next few years, R&D at Apple remained relatively steady, not even crossing the $1 billion-per-year threshold until 2008. Now given how relatively little Apple spends on R&D compared to some of its tech rivals -- Microsoft, for instance, spent more than $7 billion on R&D in 2007 and $10 billion in 2013 -- the following Jobs quote from a 1998 Fortune interview comes to mind. Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're led, and how much you get it. Jobs' quote aside, as Apple's revenue began to reach unprecedented heights on the strength of the iPhone and later the iPad, the company's annual R&D costs went through an equally impressive period of growth. Here we see that Apple's R&D expenditures from 2011-2013 alone account for nearly 50 percent (48.7 percent, to be exact) of Apple's total R&D costs since 1995. Put differently, Apple over the last four years spent more on R&D than it did during the preceding 15 years combined. Another interesting data point to look at is how much Apple spends on R&D as a percentage of its net sales. Here we see that this percentage has actually gone down in recent years, though this is more a reflection of Apple's astronomical revenue growth during that same time period. As a final point of interest, a recent European Union R&D spending report found that 45 companies across the globe spent more on R&D in 2013 than Apple did. Note that Samsung in this regard checks in at number two on the list, followed closely by Microsoft and Intel.
EA discusses expected cost increase of PS4 development
The per-game research and development costs associated with developing on the PlayStation 4 will likely be five to 10 percent higher than equivalent development on current generation systems, EA CFO Blake Jorgensen said during an investors conference call earlier this week."On any one title, it might be five to 10 percent increases in cost, but the real opportunity comes with the ability to expand what you can do in that title," Jorgensen said. "Overall you might see larger titles or larger costs because of the capability that you can deal with, but we'll also see larger revenue streams, we believe, because of the excitement around some of those big titles."EA has yet to officially determine whether these increased production costs will translate to increased retail costs, though Jorgensen made such an eventuality sound unlikely: "Typically at the start of a cycle, you've seen the pricing raise say to $69 for a core piece of software, and then over the life of those they've stripped it down to an introduction price typically now around $59. We haven't yet set pricing on our gen four [games], but you'll probably see a similar trend to that during the start of the next cycle."Jorgensen misspoke, according to EA, and actually meant to say that current-gen games start at $59 and are reduced to $49, and that's a trend we're likely to see continue. This aligns with SCEA CEO Jack Tretton's assertion that PS4 games will cost between $0.99 and $60.
Apple R&D spending spiked at the end of 2012
Apple may be on the top of its game lately, but that doesn't mean the company isn't still looking forward. According to the LA Times, the company from Cupertino has jumped up its research and development spending over the last quarter, by a whopping 33 percent. According to the most recent earnings statement, Apple raised the R&D budget by $252 million to more than $1 billion, which is even higher than the 32% jump in the previous year. Clearly, Apple's got something brewing in the R&D department lately. But of course, there's no telling exactly what. For its part, Apple says the increased spending is due to "an increase in headcount and related expenses to support expanded R&D activities," and we already know that Apple's making a big push at a new R&D facility in Israel (not to mention that it's following up on R&D opportunities elsewhere as well). Innovation is a huge part of Apple's success so far, and this increase is spending is just another way Apple's hoping to stay on top. Hopefully we'll see the fruits of this investment at some point in the future. [via Mother Jones]
Apple named "most innovative" company three years running
Global management consulting firm Booz & Co. named Apple the world's most innovative company for the third year in a row. The report notes that Apple spent less than its rivals on R&D and still trumped companies like Amazon, Google and IBM because of how it invested its money. ...it is not how much companies spend on research and development that determines success - what really matters is how those R&D funds are invested in talent, process and tools. Apple kept its top spot over #2 Google and #3 3M, both of which also defended their spots successfully for the third year in a row. One of the biggest movers was Apple rival Samsung, which climbed from #9 in 2010 to #7 in 2011 and finally to #4 this year. You can read more about Booz & Co.'s 2012 Global Innovation 1000 study on the firm's website. You can also download the full PDF report, watch a video discussion of the results from the study's authors and browse through other relevant materials. [Via Fortune's Apple 2.0]
From the lab: Lumia 920 image stabilization and 808 drop test at Nokia R&D (video)
Yesterday's lab installment gave us an opportunity to pit the Lumia 920 against competing smartphones in a low-light capture scenario, but Nokia's standard battery of tests is used to evaluate and improve far more than stills shooting. Several stops throughout the day brought us to a foam-filled sound chamber tasked with analyzing call quality in a variety of environments, a room with industrial freezers and ovens used to push the limits of operability, and a rig that can shoot with interchangeable sensors and apply image quality algorithms in real-time, without a handset in sight. Unfortunately, due to proprietary technologies and processes, we weren't permitted to photograph these first facilities, though we did manage to snap away at two other stations -- a platform that shifted up and down at adjustable speeds to test the Lumia 920's optical image stabilization, and a machine that drops smartphones against a block of concrete, used to simulate that all-too-frequent occurrence of handsets plunging towards pavement. We've seen plenty examples of the 920's OIS capabilities this week, so we won't go into much more detail on that front, but specialized (and pricey) equipment enables engineers to introduce consistent processes -- this machine simulated hand shake at different speeds, and even with exaggerated movement, the benefits were clear. A separate building contained the drop test contraption, which releases devices from an adjustable height, letting them land directly on a block of polished concrete. We tested both the 808 PureView and a Samsung Galaxy S III in this manner (with roughly 100 Lumia prototypes currently available, Nokia wasn't quite willing to risk sending one to its death). Both smartphones remained in perfect working order following the drop, so it's likely that they'll be able to handle a similar fall during regular use as well (company reps offered to test our iPhone 5, but we declined handing it over). That wraps up our week at Nokia's facilities in Finland -- there will be plenty more to explore once we have a Lumia sample in hand, but you'll find the OIS test and concrete plunge videos ready right now, posted just after the break.
Samsung spending $4 billion to renovate Austin chip factory
Premiership footballers will be weeping in envy at the way Samsung's been spending its cash this month. After splashing $822 million on a Korean R&D center, it's now chucking $4 billion to renovate its semiconductor factory in Austin, Texas. The cash will be used to increase production on system-on-chip products used in a wide variety of smartphones and tablets, presumably to cope with future demand. It's not clear if this investment is in addition to the $1 billion it was raising in January to add a new SOC and OLED line to the same facility, but it's certainly a good time to be living in Texas, right now.
Samsung gets green-light for $822 million R&D HQ in Korea
Samsung has received permission from local authorities to erect a 330,000 square meter, 10-storey high research and development center in Umyeon-dong, Seocho-gu, Seoul. The facility, which broke ground last week, is expected to cost around 1 trillion won ($822 million) and will house around 10,000 employees. The company's expecting to be able to move in by May 2015, so remember to buy a plant to take to the housewarming party.
Apple details neighbors on Campus 2 plans, extends rare request for feedback
Cupertino residents may have received an unsolicited package from their most prominent neighbor this week. No, it's not a new iPad, or an early look at the iPhone 5 -- instead, people close to Apple (from a physical perspective) opened the glossy mailing to reveal a detailed look at Apple Campus 2, which will consist of 176 acres currently occupied by "aging buildings" and trees. As we already know, the campus will feature one main circular four-story building with 2.8 million square feet of office and common space, along with an additional 300,000 square feet set aside for dedicated (secure) research buildings. There will be a restaurant, fitness center and other facilities aimed to "reduce automobile trips" as part of the company's plan to protect the environment. Apple CFO Peter Oppenheimer appeals to neighbors in a single-page letter, offering additional information upon receipt of a pre-stamped response card, which also prompts neighbors to add their name to a list of supporters, attend a public meeting or write a letter to show their support for the new Apple complex. You'll find Oppenheimer's letter in full after the break, along with additional photos at the source link.
