POET Technologies Inc.

I have asked where the R and D money currently spent will go when POET announces to the world what it has, and especially when POET has market share. Then the scramble to catch up wil be supplanted by the offers to purchase a license at probably a much higher sliding scale than early adopters. Those late to the dance.......risk becoming wall flowers.

Possibly heard at an executive level budgetary meeting.......

"YOU CAN SAVE US........WHAT ?"

Heres an example of APPL's budget from 09-15.

http://www.fool.com/investing/general/2014/11/25/the-best-is-still-to-come-from-apple-incs-chip-tea.aspx

For the processor core alone, ARM claims a 2-year development cycle (and I'm sure it gets longer as the processors become more complex). The "partner chip design" looks like another 2 years, but the final system-on-chip design can be worked on before the processor core is completely finished, so the total chip development time looks as though it's about 3 years.

To put this into perspective, using the ARM information as a rough guide, here's a table showing my estimates of when Apple could have started and finished the development of its most recent three system-on-chip designs:

System-on-chip

Start

Production

iPhone launch

Source: Author estimates.

The above would suggest that Apple began work on what will likely be the A9/A9X chips at some point in mid-2012. In order to understand what this might mean, let's take a look at another very relevant Apple-related chart:

Source: YCharts.

When the A6 likely began development, Apple's R&D budget was under $1.5 billion, but when the A9 started development, that same budget was probably north of $2.5 billion. Now, not all of Apple's R&D goes toward chip development, but I would be very surprised if a big chunk of that step up weren't related to chip development.