New product from Apple later this year

Apple, through its quarterly call to investors teased on something big coming up later this year. Peter Oppenheimer, Apple's chief financial officer, explained why the company expects its gross profit margin to drop from 34.8 per cent in the three months ended in June to 30 per cent in the next quarter, stating that it was due to "a future product transition, which I can't discuss today." Apple executives hinted that this new product would offer price points that will beat the competition. The company's strategy is to deliver state-of-the-art tech at a reasonable cost, he said. While Apple has traditionally priced its products at a premium, it has seen greater traction at lower prices: The company sold 11 million iPods in the most recent quarter, but iPod revenue only grew by 7 per cent because most of the increase in sales came from the low-end Shuffle model which saw its price cut to $49 early this year. The executives said that the company's computers are priced more competitively now than at any time in the last few years.

Tim Cook, the chief operating officer, explained this pricing philosophy, "One of the investments we make is to introduce new products that initially cost more because they delivery an entirely new level of value to the customer. Then we ride the cost curves down with value engineering and volume manufacturing, leaving us far head of our competitors. We have some of these types of investments in front of us that I can't discuss. And we will continue to execute this strategy in the future."

The new product hinted at, is expected to arrive by this September. It is widely speculated to be a web tablet of sorts -- a product with the touch interface of an iPhone, but with a larger form factor approaching that of a laptop.