Perception of Apple rides on anticipation for 'great stuff'

"We're working on great stuff," says Apple CEO Tim Cook, who dangles new product category hints to buy more product development time.

Apple CEO Tim Cook knows how to play the media and investor relations game well as he battles perceptions that the company may be out of tricks and lost its innovation mojo and pesky investor Carl Icahn, who aims to manufacture a higher stock price to cash in.

In an interview with the Wall Street Journal, Cook said that Apple bought $14 billion of shares in the last month. First, Cook is signaling that Apple shares can go higher, but the real reason for the spending is so the company can say it is generating shareholder value and keep Icahn in check. Icahn dabbles in tech and usually offers big plans that don't make value behind his own portfolio.

Graphic via Ed Bott


But the real message delivered in Cook's interview is that Apple will enter a new product category this year. The two favorites in the tech prognostication game revolve around an iWatch or iTV. Cook said:

"There will be new categories. We're not ready to talk about it, but we're working on some really great stuff."

For Cook, he has to keep dangling nuggets like that because there are worries about whether Apple can innovate going forward. The worries are unfair in many respects. Can we realistically expect a company that reinvented product categories with the iPod, iPhone and iPad to strike gold repeatedly? The odds say no.

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But the broader picture is that there are worries about smartphone fatigue and Apple ability to preserve margins. Apple has stayed out of the bargain bin fray in smartphones and has paid the market share price to some degree. Frankly, I'd take profits over market share all day. There's a reason Google, IBM and Sony are bailing on commodity hardware.

For Apple to avoid that profit margin mess in the smartphone and tablet sectors it'll need new product categories. And for us to have patience while Apple cooks up those new products, Cook needs to dangle a few carrots from time to time. Comments about new and great stuff will hold the fort for a bit longer.


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