Shares of Apple Inc. fell yesterday after the iPhone maker reported its first profit drop in a decade and Chief Executive Officer Tim Cook dashed expectations that a new handset might arrive as early as June.

The shares of Cupertino, California-based Apple fell almost 4 per cent to $397.97 early in the trading day before climbing as high as $413 and eventually closing down 66 cents at $405.46.

While Cook outlined plans to debut new products starting late this year, analysts including Gene Munster at Piper Jaffray Cos. had expected the iPhone 5S in June and now anticipate that the new handset may not ship until September at the earliest.

Cook Tuesday boosted Apple’s quarterly dividend and allotted more cash to buybacks, adding $55 billion (U.S.) to its plan to return cash to shareholders—bringing the total to $100 billion through 2015. Cook made the announcements as Apple reported narrowing margins, an 18 per cent decline in earnings and acknowledged that growth will continue to slow.

Apple has come under pressure to release a new hit product that can live up to the success of the iPhone and iPad, sending the shares down more than 40 per cent since September and wiping out about $280 billion in market value. To allay the concerns, Cook also took the unusual step of using a conference call with analysts to say that new products are in the works for later this year and through 2014, without giving details.

“There won’t be any new products or big products in the September quarter,” Munster said in an interview Wednesday on Bloomberg Radio. “One of the things that Tim Cook said is that Apple is not willing to trade off battery life and screen quality for a larger screen at this time, which we think all but probably eliminates the option of having a bigger screen iPhone in 2014, which was a disappointment.”

The earnings results underscore speculation that Apple’s era of rapid growth, fueled by the 2007 debut of the iPhone, may be over. Instead, the company is taking on more of the characteristics of a value stock, with steadier earnings and a recurring dividend, said Abhey Lamba, an analyst at Mizuho Securities USA Inc. based in New York.

“This plan will make value investors more aggressive,” he said.

More than 20 analysts cut their target price after the Tuesday earnings report. The stock is cheaper on a price-to-earnings basis than 94 per cent of the companies in the Standard & Poor’s 500 Index, according to data compiled by Bloomberg as of the close of trading yesterday.

Apple reported lower fiscal second-quarter net income amid shrinking profit margins and accelerating competition from Samsung Electronics Co. Earnings fell to $9.55 billion, or $10.09 a share, Apple said Tuesday.

Cook said Apple is working on new products that will start being rolled out later this year, and is exploring entering new product categories. Without being specific, he also referenced plans to introduce software and services along with existing offerings such as iTunes and iCloud. The company topped $4 billion in sales of applications, music, software and services for the first time in the recent quarter.

Cook may be influenced by International Business Machines Corp., which in the early 1990s under then-CEO Louis V. Gerstner decided to focus on selling computer services, said Jason Moyer, president of New York-based Brand Value Advisors, a brand- marketing firm. By convincing consumers to buy its various products, he said, “Apple’s done a great job of getting a lot of hooks in the water. Why not capitalize on that ecosystem by selling them more services?”