Five Years of Tim Cook’s Apple in Charts
Jan Dawson (via John Gruber):
R&D spend was under $2.5 billion the four quarters before Tim Cook took over, but it was almost $10 billion five years later, a roughly fourfold increase. And that’s not just because Apple’s revenue has grown during that time — R&D has actually grown significantly as a percentage of revenue over the same period, going from just over 2% to just over 4%, or almost doubling as a percentage. That’s interesting, because R&D actually fell fairly consistently as a percentage of revenue during most of Steve Jobs’ second stint as Apple CEO, from a peak of 8% in 2001 and 2002 all the way down to 2% just before Cook took over. That’s largely a function of the massive iPod- and iPhone-driven revenue growth during that period — dollar R&D spend rose from around $400 million a year to over $2 billion a year during the same time period — but it’s interesting to note that Cook has reversed the trend and significantly increased R&D spend even above and beyond the rate at which revenue has grown. Interestingly, that 2 percentage point increase in R&D spend is roughly equal to the 2 percentage point drop in margins during the Tim Cook era.
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Apple ended calendar Q2 2011 with a total balance of cash and investments of $76 billion, while it ended Q2 2016 with a balance of $231.5 billion. In other words, it has added over $155 billion to its coffers over this time. Meanwhile, an increasing proportion of this cash and investments has been held overseas — the percentage was 63% five years ago, but was 93% at the end of Q2 2016.
They are actually selling bonds (paying around 4% interest) here in order to finance the dividends and buybacks without using the overseas cash.
Perhaps one of the most significant contributions Tim Cook has made at Apple can’t be seen in any of these charts, because it’s about the changes to Apple’s culture that have happened under his leadership. The increased openness, best exemplified by the frequent interviews Cook and other executives now regularly grant to various publications (and even podcasters), is one element of this, though Apple’s secrecy about future products remains as tight as ever. But an increased sense of social responsibility, especially as regards the environment and contributions to social causes is another major change.
Probably deducting the interest paid on that debt.