Apple's CFO Hints At Mysterious 'Product Transition'

After announcing a record quarter, Apple Chief Financial Officer Peter Oppenheimer went on to offer a conservative earnings guidance for the upcoming quarter. While this is not new and Apple has a history of under promising and over delivering, this time things are different.

Oppenheimer told investors to expect earnings to come in at only 65 cents a share for its current quarter, well below expectations of 82 cents a share, a rather 'disappointing earnings guidance' after the results of the current quarter. When asked by one analyst to explain why such low expectations, the answer was: higher component costs, back-to-school discounts and a mysterious 'product transition.'
Not surprisingly this new product transition is what caught everybody's interest. After all, the iPhone was a big enough new product out of Apple, having another one released so soon and a significant improvement over an existing product is interesting.

Apple is guiding for higher sequential revenue next quarter, $5.7 billion vs. $5.4 billion in the current quarter, which is not to be unexpected thanks to a typical, annual boost from education sales. However, the higher revenue guidance and lower earnings guidance could indicate a new product introduction with lower margins or a high capitalized R&D cost.

This new product could be anything from the Mac or iPod line, or even something altogether new and unexpected. If it is a major improvement to an existing product it will be much like Apple killing of the iPod mini with the iPod nano and the company will be going from one strength to another.
Undoubtedly over the next few days the rumor sites will be working in overdrive trying to figure out what Apple has planned, but currently it is anybody's guess. Whatever it is, the company will be doing its best to keep it secret as usual.