Once a darling of both Wall Street and Silicon Valley, it has
been a rough ride for
since its stock peaked in 2012, down around 24% since then. CEO
Tim Cook faces criticism from consumers over a lack of innovation
and from investors over a lack of cash management.
With around $160 billion in cash and reserves on the books at
the end of 2013, there is a reason investors like billionaire
Carl Icahn are agitating for Apple to return some of that capital
At Apple's annual shareholder meeting, held last week in
Cupertino, California, we gained some clarity about the issues
affecting the company.
Five Key Takeaways from the Apple Shareholder
1. A plan for cash management is coming.
Tim Cook confirmed that within the next 60 days, Apple will
announce plans for how to spend and distribute its massive cash
Tm Cook didn't elaborate, however.
"If you're only in Apple for a week … or two months, I would
encourage you not to invest in Apple." Apple, he says, is "in it
for the long term" and it will be interesting to see how this
translates into its pending cash management plan.
2. No new products since iPad is getting very
When it comes to Apple, the elephant in the room is the lack
of new products. Since the original release of iPhone and iPad we
have only seen upgrades to hardware and different form factors
for existing products. iPad mini and iPhone 5s may look different
than their predecessors, but they are still just iPads and
Tim Cook started the meeting by cracking a "joke" about how he
was going to introduce new products. But after a causing a brief
stir in the crowd he said thatelep he was just kidding. The
episode struck some audience members as strange but it just feels
awkward to me.
Apple is known for glib humor and "one more thing" surprises.
But until Tim Cook has new products to show off, I doubt he will
raise the topic in such an uncomfortable way.
3. …and new products are coming.
When discussing the 32% increase in research & development
spending in 2013, Tim Cook was understandably vague. "We're
working on some things that are extensions of things you can see
and some that you can't see."
The rumored Apple iWatch
is likely one of the things we "can't see."
He did, however, specifically address Apple TV, another
product rumored to be in the pipeline.
In its current version, Apple TV is a set-top-box making any
TV an internet-connected TV via its HDMI port. Apple has long
referred to Apple TV as a "hobby," but Tim Cook stated "it's a
little more difficult to call it a hobby these days." Maybe he's
referring to the fact that this "hobby" accounted for $1 billion
in revenue in 2013, roughly 0.6% of Apple's revenue from a
project that hasn't really changed in years.
Or maybe he's referring to a brand new Apple TV product. Tim
Cook left us with this: If investors could see developments in
the company's engineering labs, they wouldn't be concerned.
4. Investors are not revolting against Tim Cook and
At the Apple shareholder meeting investors rejected the
shareholder proposals opposed by the board and approved all of
those supported by the board. Despite the criticism from analysts
and shareholders over innovation and cash management, this is a
clear sign of confidence in both Apple management and the board's
This may not seem significant, but in such a battleground
stock and with high-profile investors raising serious issues, it
is. Tim Cook retains investor confidence and that may buy him
time to prove his naysayers wrong
5. Apple is still a money-making juggernaut
As Tim Cook said at the meeting, revenue growth at Apple is
"greater than any other technology company." He also reminded us
that Apple "made more money than any technology company has ever
made" and that, other than oil companies, he's "not sure that
anyone has ever made more."
With a plan for cash management and distribution likely in
April and new products in the pipeline, I'm eager to see what
Apple offers us in 2014. And as an Apple shareholder, I remain
convinced that the company has several new products up its
sleeve, which he alluded to in the Apple shareholder meeting.
Only time will tell.
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Click here for the full story