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Research and Development Expenses of Major technology brands

How much are the technology brands spending on research and development?

Research and development has become a priority for the technological brands in the recent years which is because of the growing competition in the technology industry. Brands are in a race to bring new technologies and to grow their popularity as well as customer satisfaction. The growing demand for cloud technology has also made them invest more and more in R&D. While Amazon is leading the race in this area by spending more than 22 Billion Dollars on Research and Development, others have also followed closely. This article discusses the R&D expenditure of some of the biggest technology brands over past five years (2013-2017).

Amazon:

Amazon apart from being an e-commerce brand is also a major cloud player. Amazon Web Services requires regular and continuous investment in Research and development for the growth of its brand and for bringing new technologies to the market and to improve its level of customer satisfaction.  It reports its R&D expenses as the technology and content expenses. These expenses include the payroll and related expenses for the development of new and existing products and services as well as those necessary to support Amazon Web Services. The brand has continued to invest in several areas of technology and content so as to enhance the customer experience and increase process efficiency through faster technological advancements. Its Research and development expenses for 2015, 2016 and 2017 were 12.54 Bn USD, 16.09 Bn USD and 22.62 Billion US dollars.

R&D expenses of major technology br

 

 

Microsoft:

Microsoft is  also major cloud player and apart from making windows and Microsoft Office Products it is also known for its Microsoft Azure ad Microsoft Dynamics. It has also continued to increase its investment in Research and development and from 2015 to 2017 its expenditure on Research and Development was $12 Billion, $12 Billion and $13 Billion Dollars. In various areas Microsoft  has continued to make significant investments into new technologies from AI to Gamin and Cloud businesses. Microsoft Research has continued to make significant advances in AI and infused them into various products like Cortana, Bing, Linked In Newsfeed, Skype and more products like Hololens. Main research and Development facilities of Microsoft are located in Redmond, Washington whereas it has other facilities located around the world in Canada, China, India, Ireland, Israel, and the United Kingdom.

Apple:

The companies in which Apple operates including smartphone and computing industry are known for very rapid technological advances. It is why investing in research and development remains compulsory so as to remain competitive and profitable.Apple’s ability to compete depends heavily on its ability to develop new products and technologies and competitive products. It has continued to invest in new technologies to enrich its customer experience and continuously bring new products to the market. From 2015 to 2017, it has invested $ 8.1 Bn, $10 Bn and 11.6 Bn dollars respectively on Research and development.

Alphabet:

Alphabet is the parent company of Google. It also invests a large sum in research and development. In,fact it is quite aggressive about development of new t

echnologies as well as to grow its brands through patents and trademarks. From 2015 to 2017, it has spent 12,282 Million Dollars, 13,948 Million Dollars and 16,625 Million Dollars on R&D.  The research and development expenses of Alphabet mainly include the payroll and related expenses for employees involved in R&D of new and existing products.

Facebook R&D expenses

FACEBOOK:

Facebook, the social media platform also heavily relies on various forms of technology for its growth. A very large part of its revenue comes from advertising and the brand regularly invests in technology to make its targeting and ad campaigns more efficient and deliver better value to its customers. In the last five years, The R&D investments of Facebook have increased by more than five times. It is investing in technologies like AI, augmented reality and virtual reality so that it can better serve its audiences. Its R&D investment grew rapidly in the recent years from 5.92 Billion USD in 2016 to 7.75 Billion USD in 2017. This investment remained only at 1.41 Billion Dollars in 2013. R&D costs in the first quarter of 2018 was 2.24 Billion dollars. In 2017 it invested around 19% of its revenue in research and investment. However, this investment has also started paying off and it has started showing in the form of fast growing advertising revenue. In the field of mobile advertising, the brand has become a major competitor of Google.

Sources:

Annual Reports of Apple, Microsoft, Amazon and Alphabet.

Written by Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.

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