Nike Inc. (NKE) is planning to take sports analytics to the next level with its ongoing work on technologies that could give teams access to the performance of their athletes in real-time and hence, make smarter decisions.

This revelation comes from two Nike patent applications for a wireless vitals tracking system to be built into an athlete’s shoe. The tracking system has the capability of connecting up to 28 Bluetooth Low Energy (BLE) devices to a computer that processes the data for further display using a graphical user interface.

With just about every sport becoming increasingly dependent on technology to improve success chances, this innovation stands a chance of being a game-changer for NKE. And if history is any indication, there’s a good reason to be optimistic.

NKE's Successful R&D Trend

Macquarie analyst Laurent Vasilescu studied Nike’s patent filings in 2013 and found that it was awarded 540 patents that year, 60% more than the 340 patents it won in 2012. Moreover, a separate MarketWatch study found that NKE won over 4,000 patents between 1976 and April 2014. By comparison, Under Armour Inc. (UA) and New Balance won 51 patents over that same period. Adidas (ADDYY) won 275 and Reebok won 482.

This highlights just how successful Nike’s R&D has been over the years.

According to Vasilescu’s research, companies with huge patent portfolios tend to witness growing return on equity (ROE) with time. If that claim is true, then the benefit of having a huge patent portfolio is already obvious in NKE’s return on equity.

Since the beginning of 2010, NKE has grown its return on equity by 31.12%. By comparison, Under Armour’s and Adidas’ ROE have risen by 14.16% and 16.97% respectively.

Perhaps its superior patent portfolio is what has made NKE generate superior revenue over its competitors, since the size of a company’s patent portfolio signals things to come in the future.

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