Apple is a company that is know for keeping well guarded secrets. This is particularly true when it is working on a new product that hasn’t even been announced yet. Sure, there are occasionally leaks about upcoming gadgets that make their way out to the press via the supply chain, but those typically don’t occur until a new device is nearing production. Generally we don’t have a very good idea of what the company is up to until it is ready to unveil the next big thing. But looking at their annual Research and Development budget can often provide clues about future plans, and at the moment it appears that there is something very big indeed in the pipeline.
A few weeks back, analyst Neil Cybart took a closer look at the current R&D spending at Apple for an article he wrote that appeared on a site called Above Avalon. What he discovered is that Apple R&D expenditures have been ramping up significantly in recent quarters, even when you take into account the $200-$300 million that the company was estimated to have spent on Apple Watch development. He goes on to say that much of the R&D spending in the past few years was used to expand carrier support for the iPhone, and not for the release of any major new product. The recent increase in spending stands in stark contrast to those efforts however, making Cybart even more curious as to what Apple is up to.
The Wall Street analyst goes on to point out that starting last summer, the research and development budget is up $500 million over the previous year. Keep in mind that the Apple Watch was already winding down its development phase at that point, which indicates that Apple’s team was moving on to something new, and perhaps significantly more complex. Cybart says he thinks that the company is adding new talent and resources for a push into “future personal transportation initiatives,” which lends credence to the rumors that the company is working on an electric car.
Recently Apple settled a lawsuit with a company called A123 Systems, which manufactures batteries that are used in electric automobiles. While terms of the settlement have not been released, the entire case came about because A123 accused the tech giant of poaching its talent. Apple apparently lured away some top engineers to put them to work on their own battery project, which could eventually power an Apple branded car.
Of course, a potential electric vehicle from Apple may be just one of several projects Apple is working on, but what exactly the others could be remains a mystery. We now know that the long-rumored Apple HDTV has been shelved, so the company doesn’t appear to be pouring cash into that rabbit hole any longer. It could be working on ways to enhance home automation, but its HomeKit initiatives would suggest otherwise. Rumors persist that a new Apple TV set-top box is coming this fall, but that wouldn’t require this much R&D funding, nor would next generation versions of the iPhone, iPad, or Watch. It has to be something big, and potentially ground breaking.
To throw further fuel on the speculation-fire, last fall Apple CEO Tim Cook said in an interview that Apple is working on products that “haven’t even been rumored yet.” That might indicate that there are some truly amazing things being worked on by the R&D team, and we’ll just have to be patient to see what they produce.
Apple’s track record suggest that whatever they are working on, they’ll take their time before releasing it – that is if it sees the light of day at all. The now defunct HDTV project was under development for four years before it was killed off, and it is estimated that it took three years to bring the Apple Watch to market. An electric car – potentially self-driving – is a complex product for sure, and it could be a very long time before it it is actually introduced.
That said, if it ever does come to market, you can bet that it will, at the very least, look good.