updated 03:00 am EDT, Thu November 1, 2012
SEC report sees increasing spending on R&D
Despite a somewhat muted initial response from analysts and Wall Street to Apple's Q4 earnings, the company's annual 10-K filing with the SEC shows substantial growth over the whole year, with increases in revenue, average store income as well as spending on research and development (R&D) and manufacturing. Apple has also increased the number of retail and non-retail employees, the amount of land and retail square feet it controls, and has plans to open 35 new stores in fiscal 2013.
One of the most overlooked numbers coming out of the company is a nearly 20 percent jump in retail revenue, which came in at an average of $51.1 million per store. This was due in part to massive sales increases in Asia, particularly Japan, which saw a near-doubling of sales (a 94 percent increase) over 2011 figures, now at $5.1 billion. Overall, Apple saw a 47 percent increase in sales to the Asia region overall, built largely on its iPhone sales in the region.
Apple is also moving to increase its foreign presence, devoting nearly 75 percent of new stores in fiscal 2013 to locations outside the US. Little is known about possible locations, but Melbourne, Australia and Edinburgh, Scotland are high on the list of possible candidates, along with locations in France, Italy, Spain and at least one additional Chinese store, in Chengdu.
Though the overall percentage of Apple Retail income to the overall revenue stream is down slightly to 12 percent in 2012, the amount the stores generated was up. Apple is likely to finish the year with a total of 35 store openings, the same number planned for 2013. The company currently has a total of 390 open retail stores.
Apple's headcount increased as well, both for retail and non-retail. Currently the company has around 73,000 full-time employees, roughly 42,400 of which work in the retail stores. The overall increase is nearly 13,000 employees. The figures do not include some 3,300 temporary full-time workers.
While Apple increased its R&D spending by $1 billion to $3.4 billion in fiscal 2012, it still spends far less than its main rivals on R&D. By way of comparison, Microsoft spends about $10 billion annually on R&D. The 45 percent increase in Apple's R&D budget was entirely paid for by increased sales, keeping the costs at just 2.2 percent of revenue.
The company owns or leases 17.3 million square feet of retail building space, the vast majority of which is for its stores. About 10.9 million of the total is leased, with the majority of the owned land being either the current headquarters and related campuses or land which is being prepared for a new headquarters scheduled to open in 2015. Some of the owned land is being used for the two massive datacenters in Maiden, NC and Prineville, OR.
Lastly, the 10-K filing has revealed that CFO Peter Oppenheimer has been named Principle Accounting Officer, replacing the long-serving Betsy Raphael who announced her retirement months ago. Scott Forstall has been formally listed as "Special Advisor" to CEO Tim Cook on the heels of his ouster from the company. The move may allow Forstall to claim up to $45 million worth of vesting stock if Apple continues to employ him in some fashion through June 21 of next year.