Apple has the money to fix its AI problem — but money alone can’t buy time, talent, or competitive models.
The Big Numbers
| Metric | Value | Context |
|---|---|---|
| Total Revenue | $416B | FY2024, +2% |
| Services Revenue | $109B | Highest-margin business, ~26% of total |
| R&D Spending | $34.5B | Annual investment, AI result: Still behind |
Stock Performance
| Year | Return |
|---|---|
| 2024 | +30% |
| 2025 | +12% |
Slowing as AI concerns mount
The Google Dependency
Safari Search Deal
~$20B/year from Google for default search
Nearly 20% of Services revenue comes from Google
New AI Costs
- $1B/year to Google for AI
- -5% reduction in Safari fees
Double dependency: Search revenue + AI costs both flow to Google
Net Financial Position
| Source | Flow | Risk |
|---|---|---|
| Revenue from Google | +$20B | Dependency |
| Gemini AI Costs | -$1B+ | Increasing |
Key Risk: Google now has leverage on both sides
What The Numbers Mean
- Financially Strong — Cash isn’t the problem, $416B revenue means Apple has resources to invest in AI
- R&D Disconnect — Spending ≠ Results, $34.5B in R&D yet Apple’s AI still can’t compete with much smaller companies like Anthropic
- Services at Risk — $109B services business depends on user engagement — if AI agents bypass Apple apps, that revenue suffers
- Dependency Grows — Google leverage increases, now paying Google for search AND AI — a single competitor controls two revenue/cost lines
The Critical Ratio
$34.5B R&D Spent → 0 Competitive AI Models → Worst ROI in Apple’s recent history
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
More Resources
