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This is Tim: Apple's CEO on New categories, China growth, and free updates

Macworld Staff | Oct. 30, 2013
Here's an edited transcript of what CEO Tim Cook said about the iPhone 5S, channel inventory, the difference between the iPhone 4S and the 5C, and more at Apple's recent conference call with analysts after releasing strong fourth-quarter results.

We generated record total company revenue of 171 billion dollars, earnings of 37 billion, and operating cash flow of 54 billion. We paid over 8 billion in capital expenditures to bolster our supply chain, expand our infrastructure, and increase our retail footprint. We also completed 15 strategic acquisitions—that's an average of one acquisition every three to four weeks.

We more than doubled the size of our capital-return program to 100 billion dollars, including the largest share-repurchase authorization in history, and we've become one of the largest dividend payers in the world. In fact, we've returned over 36 billion dollars to shareholders through dividends and share repurchases in the last five quarters alone. We remain firmly committed to our objective of delivering attractive returns to shareholders through both our business performance and a return of capital. We review our capital program regularly, and our board is engaged in a discussion of capital allocation on an ongoing basis. We have solicited feedback on our capital return program from shareholders in the past, we've greatly appreciated their suggestions, and we will actively seek their input again this year. As we have in the past, the board and management team will consider a wide range of issues and be thoughtful and deliberate and we will announce any changes to our current program in the first part of the new calendar year.

We're off to a great start in fiscal year '14. We continue to be very confident in Apple's future, and we see significant opportunities ahead of us in both current product categories and new ones. We're participating in large and growing markets. Today smartphone penetration in the global handset market is only a little over 50 percent. The smartphone category is expected to grow significantly in the next few years, from about one billion units this year to over 1.7 billion in 2017. And the tablet market is growing at an even faster rate, from about 225 million units this year, to over 400 million in 2017. We're continuing to invest in R&D and distribution, we're expanding our geographic coverage, and we are building upon a phenomenal (but still very young) retail store presence.

We're also proud to be a force for good in the world beyond our products. Whether it's improving working conditions or the environment, standing up for human rights, helping eliminate AIDS, or reinventing education, Apple is making substantial contributions to society.

I'd like to thank all of our customers and our long-term shareholders for their loyalty, and I'd also like to thank Apple's many talented employees who have worked tirelessly to bring us this far, and who are passionately focused on making great products that enrich people's lives.


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