MacRumors

There have been numerous rumors claiming that Apple is working on an iPhone with a larger screen to compete with phones from competitors like Samsung, but Tim Cook's comments during today's Q2 financial results call indicate that the company is not quite ready to make a phone with a 5-inch screen.

My view continues to be that iPhone 5 has the best display in the industry. We always strive to create the very best display. Some customers value large screen size. Others value other factors such as resolution, color quality, white balance, reflectivity, power consumption, compatibility of apps, and portability. Our competitors have made some significant tradeoffs in many of these areas to ship a larger display. We would not ship a larger display iPhone while these tradeoffs exist.

It appears that Apple will not be releasing an iPhone with a larger screen until the company's manufacturing partners can supply it with a 5-inch screen that meets its demanding criteria.

The above quote is from a rough transcript of the earnings call

During today's second quarter earnings call, Apple CEO Tim Cook reiterated Apple's commitment to creating innovative products:

Work we do to produce truly innovative products is very hard. Challenges that we'll face in the future, but we're working very closely with our manufacturing partners and we are executing a very exciting roadmap.

According to Cook, Apple has a lot of surprises in store for late 2013 and 2014, stating that "amazing new hardware, software, and services" will be coming this fall and "throughout 2014."

Apple is expected to release an updated fifth generation iPad with an iPad-mini like design along with the iPhone 5S later this year. An upgraded mini with a Retina display is also rumored to be in the works, along with iOS 7 and Apple's rumored streaming music service.

When asked to reiterate on the fall announcements, Cook had this to say:

We don't want to be more specific, but we have some really great stuff coming in the fall and across all of 2014.

In addition to its standard product lines, Apple is also rumored to have projects like the long rumored iTV and the iWatch in pipeline. Cook confirmed that future growth could come from "potential new categories." From the Q&A session:

Q: Did you mention new product categories in the introduction?
A: One of our areas for growth are potential new categories.

Q: Would that be in the next year?
A: We didn't announce a specific time frame.

In emphasizing a fall timeline for Apple's product updates, Cook is downplaying the potential for summer 2013 releases, possibly hinting that new versions of the iPhone and the iPad may not come until September or later.

The above quotes are from a rough transcript of the earnings call

Alongside today's earnings release, Apple also announced a major increase in its capital return program, boosting the previous $45 billion program to $100 program.

The company announced a 15% increase in dividend payments, but Apple is making a significant increase in its stock buyback initiative, taking advantage of the company's depressed stock price to reduce the amount of stock available on the market.

The Company expects to utilize a total of $100 billion of cash under the expanded program by the end of calendar 2015. This represents a $55 billion increase to the program announced last year and translates to an average rate of $30 billion per year from the time of the first dividend payment in August 2012 through December 2015.

As part of this program, the Board has increased its share repurchase authorization to $60 billion from the $10 billion level announced last year. This is the largest single share repurchase authorization in history and is expected to be executed by the end of calendar 2015. Apple also expects to utilize about $1 billion annually to net-share-settle vesting restricted stock units.

As part of the newly-expanded capital return program, Apple does plan to take on debt and will announced its plans on that aspect of the program at a later date.

“We are very fortunate to be in a position to more than double the size of the capital return program we announced last year,” said Tim Cook, Apple’s CEO. “We believe so strongly that repurchasing our shares represents an attractive use of our capital that we have dedicated the vast majority of the increase in our capital return program to share repurchases.”

Apple notes that it will continue to evaluate its capital return strategy on an annual basis and will look to optimize the use of excess cash through its mix dividends, stock buybacks, and settling of restricted stock unit grants to employees.

Following Apple's announcement, Moody's gave Apple an Aa1 credit rating with a stable outlook, indicating that the company's obligations should be considered of high quality and hold low credit risk.

Apple today announced financial results for the first calendar quarter of 2013 and second fiscal quarter of 2013. For the quarter, Apple posted revenue of $43.6 billion and net quarterly profit of $9.5 billion, or $10.09 per diluted share, compared to revenue of $39.2 billion and net quarterly profit of $11.6 billion, or $12.30 per diluted share in the year-ago quarter.

Gross margin for the quarter was 37.5 percent compared to 47.4 percent in the year-ago quarter, with international sales accounting for 66 percent of revenue. Apple also declared a increased dividend payment of $3.05 per share, payable on May 16 to shareholders as of the close of trading on May 13. The company currently holds $145 billion in cash and marketable securities.

In addition to the increase in the dividend payment, Apple said it will dramatically increase its share repurchase authorization to $60 billion from $10 billion. The company says it expects to spend $100 billion in cash under its capital return program by the end of 2015. Apple is now paying $11 billion per year in dividends to shareholders.

Quarterly iPhone unit sales reached 37.4 million, compared to 35.1 million in the year-ago quarter, and the company sold 19.5 million iPads, up from 11.8 million in the year-ago quarter. Apple sold just under 4 million Macs compared to 4 million in the year-ago period.

“We are pleased to report record March quarter revenue thanks to continued strong performance of iPhone and iPad,” said Tim Cook, Apple’s CEO. “Our teams are hard at work on some amazing new hardware, software and services, and we are very excited about the products in our pipeline.”

Apple's guidance for the third quarter of fiscal 2013 includes expected revenue of $33.5-35.5 billion and gross margin between 36 and 37 percent.

Apple will provide live streaming of its Q1 2013 financial results conference call at 2:00 PM Pacific, and MacRumors will update this story with coverage of the conference call highlights.

Apple's stock price is trading up more than five percent after hours as the market reacts to the earnings news.

Conference Call Highlights and Q&A after the jump:

➜ Click here to read rest of article...

Google has bought aggregation and summarization startup Wavii for more than $30 million, winning a bidding war with Apple over the firm. TechCrunch is reporting that Apple wanted to integrate the company with its Siri division.

Both Apple and Google were competing for the Seattle-based startup, and Google eventually won. Apple wanted the company, which developed its own aggregation technology and natural summarizaton algorithms, for its Siri division. The 25-person-strong team including founder Adrian Aoun will be moving down from Seattle to join Google’s Knowledge Graph division.

With more than $135 billion in cash, the $30 million price tag would not have been a significant outlay for Apple, but it appears the company did not value Wavii enough to outbid Google. Wavii had raised $2 million in venture funding.

Wavii's iOS app automatically delivers news and status updates on customized topics to users and is available free for iPhone on the App Store. [Direct Link]

Philip Elmer-Dewitt has assembled his quarterly list of analyst predictions ahead of Apple's earnings report this afternoon. The list includes estimates from 67 analysts: 26 "independent" and 41 "institutional" who work for large investment houses or research organizations.

This is one of the most important earnings calls of Apple CEO Tim Cook's tenure as CEO. Apple's stock price is down significantly from its highs of last year, and investors are concerned about Apple's growth prospects across both existing and new product lines.

Typically, the amateur analysts expect significantly higher revenue and earnings than the professionals, but Elmer-Dewitt notes the gap is less than usual this time. The independent consensus has Apple just beating its guidance, while the pro's are expecting Apple to hit near the middle of its range.

The pros, as usual, are more cautious than the independents -- but not that much. The gap between the two group's average estimates (summarized above) as as close as I've ever seen them, with the amateurs calling for revenues only 1.3% higher than professionals.

In the first quarter, the company earned $13.1 billion in profit on revenue of $54.5 billion.

Last quarter Apple changed how it provides guidance, choosing to offer a range of guidance for what the company believes it can achieve, rather than a point prediction. Apple provided guidance for the second quarter for revenue of between $41 and $43 billion and gross margin between 37.5% and 38.5%.

Apple will announce its earnings for the second fiscal quarter of 2013 (first calendar quarter of 2012) and host a conference call regarding the release this afternoon at 5:00 PM Eastern / 2:00 PM Pacific. The earnings release itself typically comes in around 4:30 PM Eastern. MacRumors will have live coverage of the proceedings.

Apple today began offering refurbished models of the seventh-generation iPod nano in its online store, more than six months after the redesigned device was released. The addition comes roughly a week after Apple began offering refurbished fifth-generation iPod touch models.

The refurbished seventh-generation iPod nano models come with 16 GB of storage and are priced at $129, a $20 discount from the standard price. All seven standard colors of the iPod nano are currently available, although the special (PRODUCT) RED version is unavailable in the refurbished store.

Apple's refurbished units come equipped with the same one-year warranty that standard products offer and have been thoroughly tested for reliability. The units also come with brand-new batteries and outer shells.

NPD today released a new report highlighting the U.S. online digital video market for 2012, finding that Apple continues to dominate both purchases and rentals.

In looking at purchased content, Apple holds a commanding 67% of the TV show market and 65% of the movie market, with its closest competitors Xbox Video and Amazon each holding roughly 10% of the market.

While the competition is tighter in the rental market, Apple still holds a solid lead with 45% of the market for digital movie rentals, with Amazon taking second place at 18%.

“Apple has successfully leveraged its first-mover advantage and of iTunes, iOS and the popularity of iPhone and iPad to dominate the digital sale and rental markets for movies and music,” said Russ Crupnick, senior vice president of industry analysis at NPD. “While worthy competitors have come along, no other retailer has so thoroughly dominated its core entertainment product categories for so long.”

Notably, NPD's study does not include subscription services such as Netflix and on-demand content from cable providers. Previous studies including those types of content have found Apple's market share shrinking to roughly 5% in the face of Netflix's overwhelming strength.

Users of Apple's online services may be experiencing yet another outage today, with the company's system status page showing issues with both iCloud account sign-in and the iTunes Store over the past several hours. Apple's status page does not reveal the percentage of users experiencing issues, noting only that "some" users are affected, but we have received a number of reports about the services being down.

Outages of Apple's services have been relatively common occurrences, with occasional iMessage outages being among the most noticeable for users.

Update: Apple has now expanded its outage list to include Apple ID and Game Center, although it indicates that iTunes Store issues have been resolved.

Update 2: As of 10:30 AM Pacific Time, Apple indicates that the last of the outages have been resolved.