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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.

Our share of tablets in education is 94 percent. I mean, y'know, it's sort of unheard of; I've never seen a market share that high before. So we feel like we're doing really well here, and feel great to be making a contribution to education.

On iPhone 5S supply constraints
In terms of supply, iPhone 5S ended the quarter with a very significant backlog; we are still—we still have a significant backlog, however our supply is building each week, and we're very confident of our ability to keep ramping, and so we rolled out 30 more countries, with the iPhone 5S and 5C as of last Friday. And we'll roll out another 16 this week, and so we're right on where we would like to be in terms of achieving 100 countries by the end of the calendar year.

In terms of the retina, or the iPad mini with retina display, we'll start shipping later in November. It's unclear whether we will have enough for the quarter or not. We know how many we will have, but you really don't know the demand until after you start shipping, and so we'll see how that goes. But I think we'll do fairly well with iPad; as I had mentioned before, we feel like it's going to be a really great holiday season.

In terms of component costs, both DRAM and NAND were up last quarter from the previous quarter, DRAM we believe will continue to be up in this quarter; we think NAND will be flat, and other commodities will fall sequentially.

On higher iPhone inventory levels
I think the way—the number one thing to know in the channel inventory is that, you know, our range as you know for iPhone is four to six weeks, and we were at the low end of our range. And so that, to me, is the most important thing I'd look at anyway, I should say; you can choose to look at the thing that's most important to you.

In terms of it changing from where it's been in the past, the things that you should consider are that China was in wave one [of the iPad launch] this year, so there was a lot more point of sales there. We added DOCOMO in Japan, and so that's a large carrier to add, and what probably were not in the opening comments was that of the 14 million [iPhones], 1.8 million of those were iPhones in transit, and therefore not available to sale in the channel. We always count those in channel inventory, because they're in our sales line. And so that's how I look at the iPhone inventory.

 

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