navigates low revenue, tight margin future

Tuesday’sannouncementby that it sold more devices but with less profit during the June quarter seems to have reset investor expectations about the tech giant. The to introducing new productsgoing forward now apprs to be the abilityto sustain Wall Street confidence that CEO Tim Cook can continue steering the ship effectively without the hand of late co-founder Steve Jobs.Although overall quarterly revenue of $35.4 billion topped the consensus of $35 billion, profit fell 22 percent to $6.9 billion. As a result, Cook tried to rssure investors, announcing was“laser-focused and working hard on some amazing new products”set for the fall and 2014…“The hardware is like the skeleton, and the content and services and apps are like the muscle,”JPMorgan Chase & Co. analyst Mark Moskowitz tellsBloomberg.While much talk has gone into the need for to introduce amid-tier iPhoneto compete with Android devices in the sub-$300 range, Cook argued his company alrdy offers the iPhone 4, which along with the iPhone 4S accounts for about halfof all iPhone sales, according to a recent report.Indeed, one analyst advises to remain“the Cadillac of smart,”with roughly a third of the market share, but a majority of the profits.
Chart viaCNN.While June quarter was asurprising comeback for , itwas largely due to topping rather low Street expectations. On top of selling 31.2 million i, a record for the June quarter (26 million in the yr-ago quarter), the firmalso announced $18.8 billion in stock buybacks, double the amount forecasted.The company provided the following guidance for its fiscal 2013 fourth quarter:• revenue between $34 billion and $37 billion
• gross margin between 36 percent and 37 percent
• operating expenses between $3.9 billion and $3.95 billion
• other income/(expense) of $200 million
• tax rate of 26.5 percentAlthough demand for smart is slowing and tablet owners pass on upgrading their gadget untilthe next iPad, there are some msures can quickly take to goose investor excitement.Most perplexing, however, is how will wn investors away from expectations of triple-digit growth and high gross margins. Making matters worse ’s gross margin in the June quarter dropped to36.9 percent, down from 42.8 percent a yr ago, while internationalsales accounted for 57 percent of the quarter’s revenue.The most obvious tactic would be other good news, such as a landmark dl with China Mobile to improve flagging sales in the Asian giant, or more efforts to grab market share in the nascent smartphone nation of India.