Apple CEO Tim Cook calls Microsoft's Surface tablet "compromised, confusing"

Cook gave his early impression of Microsoft's Surface during a conference call to discuss Apple's earnings report profit of $8.2 billion last quarter on revenue of $36 billion.

"I haven't personally played with the Surface yet but what we are reading about it is that it is a fairly compromised, confusing product," Cook said.

"I suppose you could design a car that flies and floats but I don't think it would do all of those things very well."

He expressed confidence that buyers will prefer iPads.

The California-based company said that it sold 26.9 million iPhones and 14 million iPads in the recently ended quarter, topping sales in the same period last year by 58 percent and 26 percent, respectively.

The earnings however fell short of Wall Street expectations, and Apple shares were down slightly to $609.25 in after-market trades.

China remained a hot spot for Apple, with revenue there up 26 percent in the quarter and the iPhone 5 to be released there in December, according to Cook.

"We're very proud to end a fantastic fiscal year with record September quarter results," said Cook.

"We're entering this holiday season with the best iPhone, iPad, Mac and iPod products ever, and we remain very confident in our new product pipeline."

Apple on Friday will begin taking orders for its iPad mini models unveiled this week at a media event in Silicon Valley.

The same day, Microsoft will launch Surface tablets along with a new-generation Windows operating system crafted to bring together smartphones, desktop computers, laptops and tablets in multi-screen lifestyles.

The iPad mini's touchscreen measures 7.9 inches (20 centimeters) diagonally compared to 9.7 inches on the original iPad.

A 16-gigabyte version of the iPad mini with Wi-Fi connectivity costs $329, while a 16GB model with both Wi-Fi and cellular capability costs $459.

The top-of-the-line 64GB iPad mini with Wi-Fi and cellular connectivity will sell for $659. Like later versions of the original iPad, the new Apple tablet also features rear- and front-facing cameras.

The iPad mini weighs 0.68 pounds, less than half the original, and is 7.2mm thick thinner than a pencil.

Apple also unveiled a fourth generation of the original iPad for the same starting price of $499 for a 16GB model with Wi-Fi connectivity.

While the cheapest iPad mini costs $329, the device is still considerably more expensive than the seven-inch tablets from Amazon, Google and Samsung which start at $199.

Cook on Tuesday coolly introduced the iPad mini, considered his first Apple product not bearing the thumbprint of late co-founder Steve Jobs, who derided small tablets as "DOA."

Cook stood by the quote, contending that the iPad mini screen size of nearly eight inches diagonally put it in "a whole different league."

"We would not make one of the seven-inch tablets," Cook said. "We would never make one."

Apple chief financial officer Peter Oppenheimer maintained that Apple priced the iPad mini "aggressively," accepting smaller than typical margins on tablet sales for now while working to bring down production costs.

"We've seen low-cost challengers before and iPad continues to beat any competitors," Cook said. "Making the best product will win at the end of the day, so we will stay true to that."

Apple this week also introduced slick upgrades to its line of Macintosh computers, sales of which have outpaced the overall personal computer market for six years running.

Apple slimmed down its top-selling model, the 13-inch MacBook Pro, and gave it a "retina display" that boasts richer images than those on high-definition television sets. Starting price for the new MacBook Pro model was $1,699.

A new model iMac with the computing hardware built into its slim monitor started at $1,299 with the first models available in November.

Apple said that it sold 4.9 million Macintosh computers in the recent quarter in a one percent rise from the same three-month period last year. However, sales of iPods dropped 19 percent to 5.3 million, according to the earnings report.

Apple announced it would pay a cash dividend of $2.65 per share of common stock.

"We're pleased to have generated over $41 billion in net income and over $50 billion in operating cash flow in fiscal 2012," Oppenheimer said.

Apple did not comment on rumors that it is planning to launch an Internet radio service, but the unconfirmed reports caused Pandora stock to dive.