Apple Spends Big Ahead of iPhone 6 Launch

Apple’s increased spending ahead of iPhone 6 launch hints at grand ambitions

Apple is gearing up for the fall in a very big way. According to a quarterly report filing with the U.S. Securities and Exchange Commission, Apple’s spending on components and general manufacturing costs has risen steadily over the past year, with a quarter-to-quarter increase of 22 percent to $15.4 billion by the end of June. Morgan Stanley analyst Katy Huberty stated that this mammoth increase in spending can only mean one thing: Apple is preparing for its biggest product launch since the first iPhone debuted in 2007.

The rumors that Apple will launch two significantly larger iPhones alongside its first-ever wearable, the iWatch, this fall are all but confirmed at this point. As far as the iPhone 6 is concerned, leaked images of the two models, their components, and possible cases for the phones are all over the Internet. The most recent reports state that the 4.7-inch iPhone 6 will arrive in the second or third week of September, while the second 5.5-inch iPhone 6 may launch later in the fall, or on the same day. Meanwhile, most agree that the iWatch will arrive later in the fall, around October or possibly November.

Huberty stated that this represents the highest sequential growth of a June quarter since 2007, when Apple first showed the iPhone to the world.

Needless to say, these three products are among the most highly anticipated devices in Apple’s history. As such, Apple is reportedly increasing production of both iPhone 6 models to record heights, with estimates ranging from 70 to 80 million units. Apple’s 10-Q filing seems to confirm these reports. According to Huberty, such dramatic increases in spending on components and manufacturing indicate that Apple is planning its biggest launch ever.

In addition to the $15.4 billion Apple spent building the iPhone 6 and presumably, the iWatch, the company has shelled out $5.6 billion for product tooling and manufacturing process equipment, advertising, research and development, and Internet and telecommunications services. Overall, Apple’s total commitment of $21 billion grew 46 percent year-over-year and a whopping 36 percent from the previous quarter. Huberty stated that this represents the highest sequential growth of a June quarter since 2007, when Apple first showed the iPhone to the world.

Huberty believes that these staggering increases essentially confirm not only is Apple making more iPhone units than ever before, but it is also preparing to introduce a brand-new product: the iWatch. Her suspicions were confirmed by a recent report from AppleInsider, which stated that Apple spent $1.6 billion on research and development last quarter and $4.36 billion so far in 2014. The publication also noted that R&D spending increased every quarter.

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