This is Tim: Apple's CEO on the iPad, Apple TV, future products, and China

By Serenity Caldwell, Macworld |  IT Management, Apple, Tim Cook

On iTunes software and services profits

Keep in mind, in that category there are several things, not just the app store kind of revenues. And so if you looked at App Store only, it would look a little different than what you're saying [a sequential decline in profits year over year].

In terms of your question about monetization, I do believe that we can monetize more than we are from a services point-of-view, in existing areas and in new areas, and I'm particularly encouraged that when I look at the App Store and how it's doing, the strength was broad-based. In fact, in China, the growth was in the triple-digits.

On iPhone 5s vs 5c and charging more for products

We've priced things in such a way that we think is a fair price for the value that we're delivering. And we make those decisions on each thing as it gets closer to market.

On the strength of the iPhone internationally

We saw some pressure in the quarter because of the stricter enforcement of upgrade policies, but this is primarily in the U.S. as I'd mentioned last time.

But if you really look at iPhone, the strength of iPhone was very broad-based, and as I'd mentioned we gained share in a whole host of markets; from developing markets like the U.S., U.K., France, [and] Germany to more of emerging markets like China [and] Vietnam, and had the largest total sales of iPhone in the BRIC countries that we've ever seen in our history. And so we feel very, very, very good that the strength was broad-based.

On iPhone replacement cycles and upgrade frequency

Just to be clear, on the iPhone 4 question, we've sold a very, very low single-digit percentage of those, and so it has extremely minimal impact or result on the quarter.

In terms of the general upgrade, or the installed base, some of the programs that the carriers are running may serve to increase the upgrade cycle, because there're some areas where customers can pay a bit more in the beginning and have the ability to essentially upgrade each year.

But what I see as the bigger opportunity for Apple is that the smartphone market is still only a billion or so units, and it will eventually take over the entire mobile phone market. We've seen our ability to attract new users to iPhone to be very significant in the emerging markets. I mean, we were seeing new-to-iPhone-numbers on the iPhone 4s, sales in the 80 percentages, in certain large geos.


Originally published on Macworld |  Click here to read the original story.
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