This morning's Apple negative CNN report leads the pack for misleading insinuation surrounding the facts -- which are that Apple generates around six times more profit from each dollar it spends on R&D than any of its big competitors.
[ABOVE: It's all about perception. Apple is not rotten. Image c/o Lara 604 and Flickr.]
There's facts in the story
Look how the report begins: "Critics who say Apple lacks innovation have a new report to underscore their claims: The iGizmo maker barely cracks the top 50 list of corporate research and development spending."
These must be those critics who deny the iPhone 5S is peppered with unique features such as Touch ID. This clearly doesn't qualify as innovation in the CNN reporter's worldview.
It is a worldview: "Though Apple's lack of groundbreaking new products over the past several years has become a popular subject in the technology world," the report declares, as if true.
Is it true?
- The iPad Air is being hailed as the best tablet ever, but this clearly doesn't amount to innovation in the new media doublespeak of CNN Money.
- The Mac Pro sets new benchmarks for what to expect from desktops, but that's clearly not innovation enough.
Despite this attempt at media revisionism, many haven't yet forgotten how "innovative" the iPad, iPhone, iPod and iMac were when they were introduced. These four products alone cover over a decade of "innovation".
There's a thin veneer of intelligence buried at the end of CNN's rant, when it concedes: "Apple also gets more bang for its investment buck than most other companies do, in terms of sales increases."
That means that for every dollar Apple spends on R&D it creates more wealth than every dollar spent by its competitors. And that's what CNN's story should have been about -- and here it is in a table.
- Apple spent $3.4 billion on R&D in FY 2012. At the same time it generated over $41 billion income in FY 2012. As a multiple, that means it generated c.$12 for each dollar spent on R&D in the period.
- Microsoft spent $9.8 billion on R&D in FY 2012. At the same time it generated over $21 billion income. As a multiple, this means it generated c.$2 for each dollar spent on R&D in the period.
- Samsung spent $10.6 billion on R&D in FY 2012. At the same time it generated over $22 billion in cash. As a multiple, this means it generated c.$2 for each dollar spent on R&D in the period.
- Google spent $6.7 billion on R&D in FY2012. At the same time it generated over $10 billion in revenue. As a multiple, this means it generated c.$1.50 for each dollar spent on R&D in the period.
(To clarify these figures, I've used net income -- the cash left after paying business costs as the basis of these calculations. The figures used come from company statements, and I may have erred in some of these -- I found Google's oddly impenetrable.)
I am relatively confident these figures represent accurate truth -- though I would agree that it is not completely relevant to compare R&D spend in any particular year with the income made in that year: the positive effects of R&D spending in any period can take years to manifest themselves.
Despite all this, the evidence shows the question CNN should be asking isn't: "Where has Apple's innovation gone?" It should be: "How come Apple makes so much more from each dollar it spends on R&D any of its biggest competitors?"
That would be a very different, and very interesting, story.
Google+? If you're one of those who likes to use social media and also happen to be a Google+ user, why not join AppleHolic's Kool Aid Corner community and join the conversation as we pursue the spirit of the New Model Apple?
Got a story? Drop me a line via Twitter or in comments below and let me know. I'd like it if you chose to follow me on Twitter so I can let you know when these items are published here first on Computerworld.