Massive increase in R&D spending suggests awesome new Apple products are on the way

Apple Manufacturing New Products

It’s been a long time since Apple had anything to prove in the mobile world, but as iPhone iterations have become increasingly indistinguishable from one another, the Cupertino crew realized it might be time to catch up with the rest of the industry. And catch up they will — this year’s iPhone 6 display is expected to stretch to 4.7 inches and its phablet counterpart might feature an enormous 5.5-inch display.

FROM EARLIER: Apple’s iPhone 6 launch will be even bigger than anyone imagined

There are also rumors of a Retina MacBook Air, new iPad models and even a smartwatch of some kind, all of which have resulted in the biggest increase in Apple’s R&D spending and commitments to third-party manufacturing and components since the original iPhone released in 2007.

Apple R&D Growth

Morgan Stanley analyst Katy Huberty sent out a note to investors shortly after Apple’s quarterly SEC filing was published earlier this week, convinced that Apple’s spending push likely signals “major product ramps” in the near future.

“Apple has the opportunity to take share in slower growth smartphone and tablet markets with larger screens and new services. New product categories like iWatch, and services like payments could further boost growth.”

Apple’s total commitments, including manufacturing, advertising, R&D and services, add up to around $21 billion this quarter or 46% on-year growth from 2013. This could be seen as rather convincing evidence that Apple will indeed be looking to build and ship 70 million iPhone 6 units by the end of the year, and it about to enter new product categories as well.

blog comments powered by Disqus