The other solution Apple should consider is returning its focus to research and development as they did in the early ages of their company. As a product goes through its lifecycle the eventual decline of the product is inevitable. Companies that create their business with a certain product as their cornerstone must constantly innovate and improve the original idea or risk reaching their eventually maturity and saturation in a marketplace. The first positive of this R&D strategy is that Apple would be able to adapt quickly to consumer trends and industry changes because of their focus on staying ahead of the curve, continuing their role as the “Pioneers of the Digital Revolution”. Another pro of this strategy is that in the Techology industry the best talent is attracted to companies who are trying to revolutionize the industry. R&D is an investment in the future and to top tier talent that is an extremely attractive prospect. A negative of increased R&D spending is that the future of the capital used becomes speculative and makes Apple a more volatile company in the eyes of the investor because more of the company's valuation would come from products not tested by the market. Another con is that by putting more money into R&D, Apple creates a larger operating expense decreasing net income. Recommendation and Implementation:The best option for Apple is to increase R&D spending due to the reasons mentioned above. Technology Companies are valued by their prospects of the future and by their vision. Spending on R&D is an expense that is metric used to measure how much a company is working for the future. The implementation for this is simple and solves another concern Apple investors have. As of Sep-2013 Apple sits on $146,761 of cash this stagnant cash raises questions but if invested into R&D can be put to work.
You've reached the end of your free preview.
Want to read all 6 pages?
- Spring '14
- Revenue, App Store, Compound annual growth rate