Apple’s $1.6B in Q3 R&D Suggests New Product Categories

Apple has spent 4% of its sales revenue, or $1.6 billion, on research and development during the past quarter, up 36% compared to the R&D spending reported for the same period a year ago. This kind of spending is proof of new products coming, says BTIG Research analyst Walt Piecyck, speaking with the Financial Times.

Smartwatch concept balogh

In fact, the 4% of sales revenue spent in three months on R&D is the highest ratio since 2006, the year before Apple unveiled the iPhone. However, he does not specify the R&D spending before the launch of the iPad.

“People look for signs in the quarter” of what is to come, says Mr Piecyk. “Gross margins and revenue guidance didn’t seem to give the impression of any great new product during the [current] quarter. However the investment in R&D could be a better indicator.”

What such an increase in spending suggests: Apple is working on new product categories. And one of the most promising rumours seems to be that of the iWatch. We don’t have to go too far: Apple has just won the patent for iTime, a smartwatch packed with tons of sensors.

Sources speaking with the Financial Times say the iWatch probably won’t be branded as the iWatch, nor as iTime, especially since it will reportedly contain multiple sensors dedicated to health monitoring.

When asked, even Apple’s finance chief Luca Maestri hinted that this year Apple will likely do more than just refresh the iPhone and other devices.

Rumours of the iWatch have gained traction lately, fuelled by Apple’s recent hires from the medical and fashion industries.