Apple CEO Tim Cook probably just disappointed a lot of people who’ve been hoping to see his company unveil a new blockbuster product line such as an iWatch or Apple TV set. He teased the possibility in April when he said that “we have a lot more surprises in the works. … We have some really great stuff coming in the fall and across all of 2014.” But he just told analysts during a conference call that he didn’t necessarily mean a new product line. He simply meant new products. And “you’ve seen that,” he says with the recently refreshed line of iPhones, iPads, and Macs. Analysts also have been hoping for a new, low-priced iPhone that could expand Apple’s market share in developing countries.
Cook said he hopes to satisfy those consumers by continuing to offer the iPhone 4s “as the entry offer” versus the pricier new 5c and 5s models. “Some people were reading rumors that the 5c would be our entry phone,” he said. “That was never our intent.” While he doesn’t worry about flagging demand for his iPhones, Apple may find itself with an insufficient supply over the holidays. There’s already a “significant backlog” for the 5s. And it’s “unclear” whether the company will have enough iPad Minis. Cook had one bit of encouraging news for investors: The company’s disappointing profit margin forecast for the current quarter partly reflects its recent decision to give free iOS upgrades, and — for new product buyers — free copies of software including iMovie, iPhoto, and GarageBand. That led the company to defer about $900M in the revenue it expects to recognize this quarter. If you add that back in, Apple might see a profit margin of about 38.5% one analyst volunteered. The company disappointed investors with a projection that topped out at 37.5%.