Apple, Google – Please Spend on R&D Not IP

Abstract

This essay criticizes Apple and Google's choice to spend more on patent acquisition and litigation than on R&D during the so-called "smartphone wars." The piece explains that the tech titans of previous generations invested heavily in basic research, with great success for their own bottom lines and longevity as well as for society as a whole. By comparison, Apple and Google's respective R&D expenditures appear quite modest and short-sighted. The piece thus urges both companies to follow in the footsteps of companies like AT&T, IBM, and Xerox, and devote more of their massive cash reserves to pure research and less to litigation.

Keywords: smartphone wars, research and development, R&D, patent acquisition, Apple v. Samsung, Apple, Google, Samsung, Bell Labs, Xerox PARC, IBM Research

JEL Classification: O32, O34, K00