CNBC recently came up with its list of 50 companies, measured by their research quotient (RQ). CNBC partnered with Washington University in St. Louis business school professor Anne Marie Knott, who specializes in innovation, to develop this list of publicly-held U.S. companies, who invested $100 million or more in R&D.
Surprisingly, one of the biggest names when it comes to R&D and innovation, Apple Inc. (NASDAQ:AAPL) was not included in the list. Apple Inc. (NASDAQ:AAPL) has always been considered the frontrunner in the world of tech innovation and its name not being featured in the list definitely raises a lot of eyebrows. Perhaps the best reason for Apple Inc. (NASDAQ:AAPL)’s name missing from the list can be found in the methodology that was used for the rankings.
“We ranked their [companies] research quotient (RQ): the measure of R&D productivity that links R&D spending to corporate revenue growth and market value. Companies are ranked based on ability to increase revenue from R&D, not the absolute dollar value of projected revenue increase,” CNBC wrote.
We, on our part tried to figure out Apple Inc. (NASDAQ:AAPL)’s spending on R&D and the impact it had on the company’s revenues by going through Apple Inc. (NASDAQ:AAPL)’s 10-K report for the last fiscal year. In fiscal year 2013, Apple Inc. (NASDAQ:AAPL) spent $4.475 billion on R&D or nearly 3% of their net sales, which was one percentage point up from the previous year amount. Perhaps, the main reason for Apple Inc. (NASDAQ:AAPL) not featuring in the list was that the jump in sales it witnessed from $108 billion in 2013 to $170 billion in 2013 wasn’t a direct result of the small increase in R&D spending in dollar terms, that they did in the same period. Apple Inc. (NASDAQ:AAPL) spent $2.429 billion on R&D in 2011 versus $4.475 billion in 2013, which looks a pittance when compared to its net sales growth in the same period.
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