CEO Tim Cook: 'Great Things' Are Coming From Apple

Apple CEO Tim Cook Wednesday promised "great things" to come as the company moves to answer once and for all critics’ claims that Apple has hit an innovation plateau.

"We are not ready yet to pull the string on the curtain but we have got some great things that we are working on that I am very, very proud of and I am very, very excited about," said Cook in a question-and-answer session with Wall Street analysts after the company posted better-than-expected second-quarter results.

[Related: Apple Partners Don't Anticipate Large-Screen iPhone 6 Delay ]

Cook’s comments came in response to a question on how Silicon Valley behemoths Google, Amazon and Facebook have diversified in sharp contrast to Apple, which has remain sharply focused on the smartphone and tablet markets.

’We currently feel comfortable in expanding the number of things we are working on,’ responded Cook. ’So we have been doing that in the background.’

Cook’s comments strike at the heart of critics' claims that Apple has failed to innovate and create a new product category since the death two and a half years ago of legendary Apple co-founder and CEO Steve Jobs.

Cook stressed that what distinguishes Apple is its laserlike focus on delivering breakthrough high-quality products. Apple customers, he said, want ’great, insanely great, and that’s what we want to deliver."

’When you care about every detail and getting it right, it takes longer to do that,’ said Cook. ’That has always been the case. That is not something that just occurred.’

Cook’s comments came after the company handily beat Wall Street expectations by delivering earnings of $10.62 billion, or $11.62 per diluted share, on sales of $45.6 billion for the second quarter ended March 29. The Wall Street consensus was $10.18 per share on sales of $45.3 billion, according to a survey of analysts by Thomson Reuters.

In the year-ago quarter, Apple earned $9.5 billion, or $10.09 per diluted share, on sales of $43.6 billion.

Apple’s $45.6 billion in sales for the quarter represented a ’new March quarter record’ with the strongest nonholiday sales ever for the company, said Cook.

Apple sold 44 million new iPhones in the quarter, compared with 37.4 million in the year-ago quarter in what Cook described as strong broad-based performance for Apple’s three iPhone offerings.

Apple sold 16.4 million iPad tablets in the quarter, compared with 19.5 million in the year-ago quarter. But Apple maintained that the drop-off was exacerbated by channel inventory and that the decline was just 3 percent.

Cook, in fact, said iPad sales came in at the high end of the company’s expectations even though they were below analyst estimates because the company ’significantly reduced’ iPad inventory in the channel. What’s more, he said, Apple iPad comparisons were hurt by an iPad Mini sales backlog that was fulfilled in the year-ago quarter.

’The iPad has a great future,’ said Cook. ’And of course the thing that drives us more than any of this are the next iPads -- the things that are in the pipeline, the things that we can do to make the product even better. There is no shortage of work going in on that nor any shortage of ideas.’

NEXT: Apple Increases Stock Buy And Quarterly Dividend

Apple also increased its stock buyback by another $30 billion, increased its quarterly dividend by approximately 8 percent to $3.29 per share and announced a 7-for-1 stock split. The increased payout to investors sent Apple shares up 8 percent, or $40.20 to $564.98, in after-hours trading and even garnered Apple a plaudit on Twitter from activist investor Carl Icahn.

’Agree completely with $AAPL's increased buyback and extremely pleased with results,’ Tweeted Icahn. ’Believe we’ll also be happy when we see new products.’

Icahn followed up that Tweet with a jab at Apple. "As we said at conference yesterday, we continue to believe $AAPL remains meaningfully undervalued. Many analysts fail to understand company.’

Jerry Zigmont, owner of MacWorks, an Apple consultant based in Madison, Conn., believes that the next round of innovative products will come at the company’s World Wide Developers Conference (WWDC) June 2-6 in San Francisco.

’If products don’t come out at WWDC, I think that may be a time to start to have some concern, but not until then,’ Zigmont said. ’WWDC is an extremely important date for them now, because we haven’t seen anything new. I still think that they’ve got an infrastructure in place to have a very, very long pipeline in new products to be released.’

Other partners expressed more serious concerns about Apple’s lack of recent groundbreaking products.

’They haven’t innovated that much basically since Steve Jobs died,’ said Steven Kantorowitz, president of CelPro Associates, an Apple partner based in New York. ’People are waiting for what's going to be the game-changer, and we haven’t seen it yet with Apple. They were the game-changer for a while, now they’re in a tight race with Samsung.’

Kantorowitz believes that the lack of new products could prove costly to Apple in the future. ’We’ve seen that with BlackBerry and other companies,’ he said. ’Unless they innovate, people are going to change devices. It happens with every other device manufacturer. You have to innovate or you get left in the dust.’

PUBLISHED APRIL 23, 2014