Tech News

Yesterday Apple held its annual shareholder’s meeting at its Cupertino headquarters. All the top brass were there to answer questions from the men and women to whom, let’s face it, they must eventually answer. Of course, that didn’t stop Steve Jobs from being his usual tactless self, quipping during a lengthy comment from one shareholder, “Do you have a question?”

There’s a lot of information to digest, so I’ve condensed the juiciest morsels into what I hope is a more accessible short-form. Here goes!

All seven board members were re-elected; there was an advisory vote on executive compensation and Apple’s public accounting firm was chosen (it’s Ernst & Young, by the way.) Votes also were cast on two shareholder proposals. The first called for a published “sustainability report” detailing the company’s environmental policies and its contingency planning in the face of climate change. The second proposal was for the creation of a second board of directors, tasked with overseeing Apple’s environmental policies and business strategy in the face of climate change. The board felt they were already doing a fine job in both these areas, and recommended voting against the new proposals. Votes were counted and, unsurprisingly, neither proposal was successful.

Green

According to Macworld, Jobs claimed that Apple is the first company to work directly with suppliers on issues ranging from environmental impact to worker protection and education. Macworld’s Dan Frakes writes;

Taking a jab at other companies, as well as organizations such as Greenpeace, [Jobs] noted that “other companies just make promises” and attend conferences and events to “schmooze with [environmental groups], but the work ain’t getting done,” whereas Apple is actually taking steps to improve the company’s real-world green credentials and treatment of workers.

Jobs also noted that the smaller packaging used across Apple’s product line has reduced the number of annual cargo flights “by the hundreds”;

“It’s the right thing to do from an environmental point of view; it’s the right thing to do from a business point of view.”

Money

In its first quarter 2010 investor conference call, Apple announced it had $39.8 billion in the bank at the end of December 2009. The question now is, what on earth should it do with it? Spend it? Save it for the next recession? Perhaps pay dividends to shareholders — something BusinessWeek says the company has not done since 1995? Jobs said;

We know if we need to acquire something – a piece of the puzzle to make something big and bold – we can write a check for it and not borrow a lot of money and put our whole company at risk. The cash in the bank gives us tremendous security and flexibility.

You never know what opportunities are going to be around the next corner. We are a large enough business now that, in order to really move the needle, we have to be thinking pretty bold – pretty large.

New Role

On the matter of Apple’s new role as a ‘mobile devices’ company (first announced by Jobs in January and reiterated by Tim Cook in last month’s earnings call) Jobs said;

This is not something that we’re ordaining from the top. This is something our customers are saying with their dollars, if you just look at the products that we’re selling. They’re telling us what they think is important and we’re reflecting that.

But specifically, what does this mean about the future of Apple’s desktop Macs, the iMac and Mac Pro? “We love desktop computers,” El Jobso assured the shareholders, “And plan to continue making them.” So, that’s alright then.

Asia

When asked about Apple’s efforts to increase international sales, Jobs turned to (VP of Retail) Ron Johnson, who announced that Apple is looking to open 24 more stores in China to join the existing store in Beijing. This is to be expected, given how important (and lucrative) China is to Apple. DigitalDaily’s John Paczkowski writes, “Mac sales in China increased nearly 100 percent year over year in the first financial quarter of 2010… while iPhone sales [are] ramping up.”

Apple's Beijing Store

Beyond the Mac, Paczkowski quotes Tim Cook on Apple’s overall revenue in that market;

“…if you look at greater China last quarter, which is China, Hong Kong and Taiwan, our revenues tripled year-over-year… We have a tremendous focus on it.”

I guess it’s only right China should get a little Apple-love… after all, they make most of Apple’s gear in the first place!

Stability

Finally, there was a moment of fun, Jobs-style; a shareholder wanted to know of Jobs, “What keeps you up at night?”

“Shareholder meetings,” Jobs immediately shot back, before getting very serious and adding, thoughtfully;

“Apple requires stability in the world. People aren’t going to worry about which laptop to buy if they can’t afford dinner, can’t afford to send their kids to school, can’t afford textbooks. There are things much bigger than us that are out of our control. So we try to just do the best we can.”

Bravo, Steve. And bravo, Apple.

Apple’s Chief Operating Officer Tim Cook wasn’t shy about the company’s focus through 2010, in a conversation with Goldman Sachs analyst David Bailey. The talk took place at the Goldman Sachs Technology and Internet Conference this Tuesday in San Francisco, and was given before an audience of investors. An audio stream of the talk is available here.

In general, the talk was what you’d expect. Cook sang the praises of the company’s current offerings, and gave highest praise to the yet to be released iPad, a device for which the company obviously has very high expectations. But he also took time to frame one of the company’s weakest sellers in a fairly dismissive light.

Cook called Apple TV “a hobby” owing to its low sales numbers when compared to the Mac line. He did, however, state that Apple would continue to invest money into its hobby, if only because “our gut tells us there’s something there.” While being dismissive about a weak seller is a good strategy when talking to investors, I can’t imagine the comments made do much for consumer confidence in Apple’s set top box, and it must be especially disheartening to hear for those that already own the product.

While downplaying Apple’s role in the home theatre TV-viewing aspect of consumers lives, Cook also couldn’t stress enough the significance the Mac maker has in terms of its viewing on mobile devices. Much of the talk focused on the iPad, which is rumored to be gearing up for pre-sale later this week. Cook basically reiterated the company line regarding the iPad’s considerable web browsing, email and photo viewing capabilities, and he went after netbooks, too:

The netbook is not an experience people are going to continue wanting to have. When they play with the iPad and experience the magic of using it… I have a hard time believing they’re going to go for a netbook.

I suppose when asked how your new product, which occupies an entirely new category, is going to compete with a tried and tested strong seller, “magic” is as good an answer as any. But Cook emphasized the company’s confidence in the product by pointing out how focused it manages to keep its product line, despite the temptation to grow it further, owing to the high number of great ideas they have coming from the elite staff they hire. He also reminded investors about the pricing strategy Apple took with the iPad, saying “we didn’t want to leave a pricing umbrella for competition, so we got very aggressive on this.”

Cook also said he wasn’t afraid of the iPad cannibalizing sales of its other products. That point I agree with, though I would be very afraid of the opposite being true. It seems to me that a lot of potential iPad owners would probably be better suited by an iPhone/iPod touch or a computer. The iPad could do more to help people choose a lane than encourage them to straddle two.

Another area Cook addressed was Apple retail, revealing that Apple hopes to aim higher this year than it has in 2008 and 2009 in terms of new store openings. It’s been staying closer to the 25 stores per year bottom end of its target range owing to the recent international economic troubles, but it has 50 new locations planned for 2010. The expansion plans bode well for the future, since the company depends so much on direct sales.

U.S. customers hoping for an end to exclusivity will be disappointed by Cook’s comments regarding AT&T. He mainly discussed the advantages of a single carrier model, citing simplicity and the ability to work together in close partnership to introduce innovative new features. He also added that while Apple has seen more sales and higher profits in all the markets where multiple carriers have been introduced, that won’t necessarily be the case every time. Brave words considering there’s no data to back them up. Cook’s defense of the much-derided AT&T was definitely the low point of the talk, and struck me as fairly hollow overall.