Apple's Latest Earnings Report Hints at New Products

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Apple CEO Tim Cook speaks about iOS 8 at the Apple Worldwide Developers Conference in San Francisco on June 2, 2014.

Image: Jeff Chiu/Associated Press

By Seth Fiegerman2014-07-23 14:15:16 UTC

Apple's execs didn't say much on its third quarter earnings call on Tuesday about the various new products rumored to debut this fall, but the earnings report may offer some clues.

In the report, Apple revealed that it spent $1.6 billion on research and development in the June quarter, up more than 30% from the same quarter a year earlier. Walter Piecyk, an analyst with BTIG, noted in a writeup [registration required] that this suggests Apple is likely investing in more than just updated iPhones and iPads.

See also: The Complete Evolution of Apple's iOS in One GIF

"The ramp of R&D expense is a good indicator that Apple is working diligently on something new," Piecyk wrote. "R&D investment topped 4% of revenue, a level it has not reached since 2006, in the quarters before the first iPhone launch."

Multiple reports in recent weeks have said Apple will unveil a smartwatch in October — often referred to as the iWatch — entering into its first big new product category since it released the iPad in 2010.

Some analysts also believe that Apple is on track to launch the next iPhone model (or models) at the end of September, based on the company projecting sales of $37 billion to $40 billion in the upcoming quarter.

Gene Munster, an analyst with Piper Jaffray, pegged the launch date as Sept. 26, based on his projections for existing product sales and the number of new iPhone devices the company would sell at launch in the final days of the month before the fourth quarter ends.

Apple is widely expected to launch two larger iPhone models, one with a 4.7-inch display and another with a 5.5-inch display. A report in the The Wall Street Journal this week said Apple is asking suppliers to manufacture as many as 80 million iPhones for the fall.

The Cupertino company posted earnings of $1.28 a share on revenue of $37.4 billion for the third quarter, beating earnings estimates but coming in shy of Wall Street's revenue estimates.

Apple stock was up about 1% in early trading Wednesday following the earnings report.

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Topics: apple, Business, Gadgets, iwatch, smartwatch, tim cook