Apple Inc CEO Tim Cook, moving swiftly after taking over from the late Silicon Valley icon Steve Jobs, fulfilled a longstanding desire of investors by initiating a quarterly dividend and share buyback that will pay out $45 billion over three years.

The world's most valuable technology company will start paying its first dividends since 1995 -- a regular quarterly payout of $2.65 a share -- in July, and buy back up to $10 billion of its stock beginning in the next fiscal year.

The $10 billion annual dividend program, which Cook said will be reviewed periodically, ranks among the largest current U.S. corporate cash payouts.

But he told analysts on Monday that making great products remained Apple's top priority, echoing the sentiments of his former boss, who died in October after a years-long battle with cancer.

Jobs' former lieutenant has impressed Wall Street since taking the helm. He has made his mark by revealing Apple's production partners and initiating investigations into allegations of labor abuse in its supply chain, among other things.

Now, the man once hailed as an able deputy and supply chain guru is reaching out to Wall Street.

We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure, Cook said. You'll see more of all of these in the future.

Innovation is the most important objective at Apple and we will not lose sight of that.

When Cook was announced as CEO, many on Wall Street worried he lacked Jobs' vision for devising groundbreaking consumer electronics. But Apple's shares have gained more than 50 percent since Jobs' death and set a record above $600 last week as investors noted the assurance with which Cook has taken the reins.

Cook oversaw the rollout of the iPhone 4S last year and presided over what he said on Monday was a record weekend of sales for the new, 4G-enabled iPad.

But many investors are still waiting to see an Apple TV or something similar: a gadget that will transform the industry the way the iPod and iPhone did. On a conference call, one of the first questions that cropped up regarded the company's product pipeline. Cook declined to comment.

Apple shares were up 1.3 percent at $593.34 in morning trade on the Nasdaq.

FINALLY

Apple expects the share buyback program to run over three years, with the primary objective to offset the impact of employee stock options and equity grants.

Its annual dividend yield will come in around 1.8 percent. That ranks above Oracle Corp and International Business Machines Corp but falls just short of the average of around 2.4 percent for companies in the Standard & Poor's 500 index, analysts say.

The best thing about it is that we can go back to focusing on what Apple does best, said Hudson Square Research analyst Daniel Ernst.

The company will still maintain a war chest for other strategic opportunities, Cook said. These decisions will not close any doors for us.

The maker of the iPhone, iPad and iPod has $98 billion in cash and securities, equal to about $104 a share, according to ISI Group analyst Brian Marshall.

The company said it anticipated using about $45 billion of domestic cash in the first three years of its buyback and dividend programs.

Asked about Apple's substantial cash parked overseas, Chief Financial Official Peter Oppenheimer said the company had no plans to repatriate it at this time.

The current tax laws provide a considerable economic disincentive to U.S. companies that might otherwise repatriate the substantial amount of foreign cash that they have, he said. That's our view. And we've expressed it.

Apple last paid a dividend in 1995, according to Thomson Reuters data. In 1996, the company posted a net loss of $816 million. Apple is an overcapitalized company, and it's probably better to have the cash in the shareholders' pockets than in Apple's pockets, said John Strand, CEO of Copenhagen-based Strand Consulting.

(Additional reporting by Yinka Adegoke, Sinead Carew and Nicola Leske in New York and Tarmo Virki in Helsinki, Writing by Edwin Chan; editing by John Wallace)