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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.

On the iPhone roadmap
Everything that you mention is the front end of a long roadmap. We have the first 64-bit smartphone, as you mentioned, and this is our first use of the fingerprint sensors. And if you've used it so far, you know that it's pretty profound to both use it from a security point of view and to use it also to purchase apps and music and movies, et cetera. And so both of these, I think, the most important person here is what our customers think. These new innovations on the 5S and the 5C combined led us to have our best iPhone launch ever, selling about 9 million units through the weekend. So, we're off to a great start.

On the true entry-level iPhone
If you look at what we've down with our iPhone line. We're selling the iPhone 4S as our entry offer, we're selling the iPhone 5C as sort of our mid-tier offer, and then of course, the iPhone 5S. And our goal is to overall have growth for total iPhone, but also within that, we want to have each of those categories grow as compared to what we were doing previously. And so if you look at the total offers that we're making in the low-end space and mid-tier and high-end, the sum of all the price points we offer there, we'd like to grow in each one of those. And we're really pleased that we did that. So that's how we measure, partly measure, success. Of course the most important thing for us is to make a great product. But we do need growth, and we're happy that we've seen that.

I realize that some people were reading rumors that our entry-level iPhone was the 5C, but that was never our intent. Entry level phone was iPhone 4S. As you know from comments that I've made previously, we were selling the iPhone 4 in very good volumes. And as we begin to experiment in different regions at somewhat lower price points, we saw a fair amount of price elasticity. And so we're hoping and thinking that will continue with the 4S.

All things being equal, what we would normally see on our products is that you have a large number of people who are early adopter related, that come into the market right after we announce and buy our very best product. And so other things being equal, that's what we expect to see.

On future products
I didn't say in April that you would see them in this year and the first half of next year. So just to be clear on that. But what I have said is that you would see some exciting new products from us in the fall of this year and across 2014. And I obviously stand by that, and you've seen a lot of things over the last couple of months. In terms of new product categories, specifically, if you look at the skills that Apple has from hardware, software, and services, and an incredible app ecosystem, these set of things is very, very unique, I think no one has a set of skills like this, and we obviously believe that we can use our skills in building other great products that are in categories that represent areas where we do not participate today. So we're pretty confident about that.


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