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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 navigating supply constraints this year
As I mentioned, on the iPhone 5S, I feel like we're doing really well on supply. The demand is very robust, and so we are in backlog right now. But I feel confident about us continuing to ramp and do quite well for the quarter.

On the iPad mini, we'll start shipping later this month, and it's very difficult to forecast exactly when supply/demand will balance there. And we'll also see about the iPad Air as we go out this week. I think we'll have a really good weekend, but it may be that not everyone can find one that wants one.

I think versus last year, one key difference is we announced one of our key Macs, the iMac, but we didn't begin shipping it until the end of December. And so we went for more than two months with minimal iMac sales, and therefore from a Mac point of view year-over-year, last year, we had our only down quarter—down versus the market, that is—in the last thirty quarters. And so I don't envision that happening this year. I feel really good about the way that the MacBook Pros have gotten off last week; they've gotten off to a huge start.

I feel great about Mac growing year-over-year this quarter. I feel great about iPad growing year-over-year this quarter as well, and you can tell that from the strong guidance numbers that Peter [Oppenheimer] gave earlier.

14 million iPhone channel inventory
The 5S was in huge backlog, and so any kind of 5S that was in the channel was a transitionary-—kind of, maybe perhaps in transit, and so forth. We did have, as I mentioned before, we had 1.8 million units of total iPhone units in transit at the end of the quarter. So that's a pretty substantial number.

On carriers, and subsidies
I think carriers like to sell as many units as they can, and get as many people on their service. And in most regions, locked in to be on service contracts. And so they're very predictable, and reliable, and I don't really see that changing.

I think the carriers have come up with some different—or some carriers have come up with different sales programs that might appeal to someone who wants to upgrade their phone annually, instead of every other year; I think those programs, in general, probably reduce the subsidies somewhat in the aggregate for people that take these up, but customers may view that that's a fair exchange for getting to upgrade more often. And so there's a customer proposition for it.

Other than that, I think we have great relationships with the carriers, and I think they were, as we were, very happy about the iPhone rollout.


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