If there's one thing IBM (IBM 0.16%) stock investors can count on, it's innovation. Fool contributor Tim Beyers explains the importance of Big Blue's labs in the following video.
While there's no disputing that IBM's core business is selling hardware, software, and accompanying services, R&D runs differently at Big Blue than it does elsewhere. The company's labs help introduce patent-worthy scientific breakthroughs that result in more than $1 billion a year in royalty income.
And there's more on the way. IBM set a new record with 6,809 patents issued in 2013, its 21st consecutive year atop the industry charts in terms of awarded patents. Each new filing offers an opportunity to generate additional royalty income at a near 100% gross margin.
The latest join the ranks? Two new polymers -- dubbed "Titan" and "Hydro" -- that research chemist Jeannette Garcia discovered when accidentally omitting a step in what should have been a routine experiment, The New York Times reports. The results were anything but. Garcia's new polymers are strong, light, and self-healing for potential use in high-temperature and industrial environments. Long-term applications could include advanced manufacturing or even aeronautics. (Fuselage and wing construction for lightweight commercial airliners, for example.)
How should investors think about this? With a sense of reassurance, Tim says. IBM's stock chart hasn't been much to look at over the past two years but the core elements of the business -- i.e., a service company with underlying investments in game-changing breakthroughs -- are still intact.
Now it's your turn to weigh in. Do you believe IBM's blue-sky R&D efforts are critical to the future of the business? Why or why not? Please watch the video to get the full story and then leave a comment to let us know your take, including whether you would buy, sell, or short IBM stock at current prices.
