Notes on technology, product strategy and miscellany.
The fruits of innovation.
When will Apple need to cut margins to fuel growth?
Asymco highlights yet again the incredible yields Apple has been able to squeeze through innovation. The gist of the article is that rapid growth in highly competitive markets is only possible if you eat into pricing and margins. Apple has not (and probably will not) cut margins, ergo the market is not highly competitive.
Over a recent four-year period, Apple spent $4.6 billion on R&D while growing revenue from $25B to $43B. Microsoft spent 6+ times as much on R&D, and it’s not like they’re minting a bunch of new billion dollar businesses. (source) That’s crazy awesome capital efficiency.