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Comment by bradknowles | Hacker News Reader

Apple could not sell the phone at a price more in line with other manufacturers, because they spend a shit ton of money on R&D and other costs that the other manufacturers don’t bother to do — because they know Apple will do it, and they can leach off the work Apple has done.

There will always be lower priced competitors who are happy to be in a race to the bottom. Apple is smart to recognize that they cannot do this, for it would spell the doom of the company.

Luxury brands don’t do races to the bottom. To do so would violate their entire reason for existence.

Sure, you might want that Ferrari or Lamborghini to be given to you on a silver platter, or sold to you for just $10.00 each, but do you really honestly expect them to be that stupid?

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A minor point, Apple's R&D spend is significantly lower as a percent of budget compared to most of the market. I found this article really interesting:

https://www.ped30.com/2019/03/10/defense-apples-14-billion-r...

Edit for context: in 2018, 11.6bn or 5.1% of revenue. Compare to Amazon it's half as many dollars and 1/3 the percent.

What is it compared to other phone manufacturers? Percentages don’t really matter as much as raw numbers. You can only throw so much money at any technology without having a diminishing rate of return.

It's difficult to say what they spend on Phone R&D, but Samsung spends about 11-12% on R&D in general. Huawei and Google clock in around 15% by public numbers and Intel for comparison sits about 20%. Microsoft is somewhere around 12-13%.

Apple's total R&D spending is well below their contemporaries as a % of revenue.

Samsung has a lot more products and verticals as does Google.

Looking at all of the money that Google spends on research - they still make 90% of their revenue on ad sales and have had a string of failures and also rans.

No one can seriously argue that Apple’s ARM processor designs aren’t top notch, they just took over Intel’s modem division and they still depend on Intel for much of their computer hardware - except for the T2 chips that are part of their ARM designs

What else do you propose that Apple spend money on?

Horace Deidu just posted a graph on twitter showing that just their services revenue is larger than all of Apple’s revenue a decade ago.

I'm not suggesting anything about Apple's quality of engineers or what they should spend money on. I am only observing that their R&D spending is below other companies that are considered in the same class or industry as a percent of revenue.

Their spending (as percent) is approximately 1/3 of other phone makers, 1/3 of software developers, or 1/4 of other chipset manufacturers.

These numbers are all very rough of course because, as you point out, all of these companies work in multiple sectors and R&D spending is not disclosed in that much detail.

Then their engineers are not very good, because all the improvements now come from Google (Night Sight, 3D gestures), Huawei (5x zoom), Samsung (60MP sensor), Oppo/Xiaomi (front camera behind the display) and so ones.

Without commenting specifically on the features you mentioned, I'll just observe that being first to market with a particular feature doesn't mean that you have the best implementation of that feature.

So either Apple is a class-leader in R&D or they wait till others have cut their teeth on tech before adopting it, thereby minimize their costs but are also not leaders in R&D and dont have others stealing from their work. Which is it?

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