Apple CEO Tim Cook revealed that the company’s elevated research and development expenses are the result of renewed commitment to generative AI research as Apple races to catch up with AI offerings from its competitors, according to a new interview with Reuters.
Apple’s annual R&D spending now stands at $22.61 billion so far in 2023, which is around $3.12 billion more than what it was at this point in time last year. Cook owed the increased spending to the company’s focus on artificial intelligence research, which includes the latest generative AI trend in consumer technology.
We’ve been doing research across a wide range of AI technologies, including generative AI, for years. We’re going to continue investing and innovating and responsibly advancing our products with these technologies to help enrich people’s lives. Obviously, we’re investing a lot, and it is showing up in the R&D spending that you’re looking at.
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Apple CEO Tim Cook
Cook also offered a few comments on Apple’s fiscal Q3 2023 earnings. Despite iPhone revenue being reported to be less than analysts’ consensus, Cook revealed that growth in China hit double-digits in addition to high iPhone sales in other unnamed regions. Other products also saw strong sales in China, hitting new revenue records for Wearables, Home and Accessories in addition to Services.
This was really done by attracting a quarterly record of switchers to the iPhone, as well as having a strong upgrader activity. We also set quarterly records in China for both wearables, home and accessories, and services. Almost half of the Mac buyers during the quarter were new to the product, and we continue to see strong upgrader activity to Apple Silicon
Apple CEO Tim Cook
Cook also revealed that nearly half of all Mac buyers during the quarter were buying their first Mac machine ever, as upgrades to Macs with Apple silicon remain strong. Mac revenue reached $6.84 billion, slightly beating analysts’ estimates of $6.62 billion.
The massive investment in generative AI comes as Apple is rumored to have developed its own in-house Large Language Model (LLM) frameworks which the company used to build a ChatGPT-like chatbot meant to be used internally by Apple engineers. As a result, Apple is said to be aiming to release a “significant” consumer-facing generative AI product as early as next year.
