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Probably. Apple is doing well because they seem to know what will work with the majority of the consumers, what they will fork over cash for in mass numbers. Apple is of course willing to massively invest in high-end R&D to make it happen.

Apple spends a lot less - in absolute dollars and as a percentage of revenue - than Microsoft, or even Sony in terms of R&D.

They do have great marketing, though!

Apple spends a lot less - in absolute dollars and as a percentage of revenue - than Microsoft, or even Sony in terms of R&D.

Dollars wisely spent vs. dollars wasted I guess. How many billions did MS waste in Vista development before the restart? In any case, the proof is in the products.

Apple spends a lot less - in absolute dollars and as a percentage of revenue - than Microsoft, or even Sony in terms of R&D.

Apple targets its R&D spending... Microsoft throws money at it. Apple gets results. Microsoft? Well, the results seem to speak for themselves.

Another reason Apple spends less is that they operate as if they were a dynamic startup with minimal resources. Apple has fewer abortions than Microsoft, meaning the R&D money that is spent actually produces returns. Investors like that. And of course it helps that Apple leverages open source products instead of developing everything in-house.

Also, Apple is willing to take big risks. The iPod was heavily criticized when it first came out, people said the tablet market never worked and never could, and of course the retail stores were supposed to be a really dumb idea. The iTunes Store was supposed to fail because nobody would pay for online music when it could just be downloaded free P2P. All of those have been immensely profitable, but should have flopped according to conventional wisdom, costing Apple dearly.

I guess it helped that Jobs went from startup (Apple) to startup (NeXT) to buying a tiny young company (Pixar) and never lost that culture. Gates sat at Microsoft for about 30 years. He got fat and slow, and so did the company.

I keep thinking of new things. There is another reason Microsoft spends more, and it’s not bad, but shows how the R&D doesn’t necessarily equate to better Microsoft products.

Microsoft does a lot of XEROX PARC kind of work that may never be used for profit, but still is quite interesting. Take PhotoSynth for example. I’ve done 360 degree panoramas for a long time, taking multiple pictures, carefully stitching, etc. PhotoSynth took it to a whole new level. I wonder how much that R&D cost. Microsoft also develops a lot of things in conjunction with universities, so a bunch of the R&D money may be going there too.

Microsoft is a better member of the community than Apple, for sure. That isn’t really what investors are looking for.