Despite outgunning Apple Inc. on research and development spending, struggling handset maker Nokia Corp. was unable to head off the threat of the iPhone back in 2007, a comparison of R&D expenditures at Apple and Nokia shows.
Between 2004 and 2007—the years leading to Apple’s first iPhone launch—Nokia’s total research and development spend was €17.1 billion ($22.2 billion at today’s exchange rate), against Apple’s $2.5 billion in the same period.
So Nokia spent nine times more than Apple on R&D during those years. While noting this, one should keep in mind that Nokia’s sole focus was on making mobile devices and wireless network equipment, while Apple, by mid-2007, had only just started shipping its first iPhones and was still generating most of its revenue from its range of Mac computers and iPods.
Between 2004 and 2011, Apple’s revenues increased roughly 1,200% while its net profit surged by 9,600%. Meanwhile, Nokia has turned into a loss-making device maker, with last year’s revenue just 31% higher since 2004.
To this day Nokia continues to outspend Apple in that department, spending $7.3 billion last year against Apple’s $2.4 billion.
Raj Rajput [ MBA ]
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