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Tim Cook downplays growth worries and outside threats at Apple shareholder meeting

Tim Cook downplays growth worries and outside threats at Apple shareholder meeting


Apple's board re-elected, but most shareholder votes anti-climactic with controversial preferred stock proposal off the table

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tim cook

Apple CEO Tim Cook took a moment at the company's annual shareholder meeting to apologize for the company's falling stock price. "I don't like it either," he said. "Neither does the board or management — where the stock trades now versus a few months ago — but we're focused on the long term."

The long-term question shareholders have for Apple is whether the company can continue its tremendous growth. In the Q and A session after the meeting, Cook mostly talked about the past year. "We grew by about $48 billion — more than Google, Microsoft, Dell, HP, RIM, Nokia combined," he said. All of Apple's markets — both products like smartphones and tablets and nations like China and Brazil — are fast-growing. Cook said Apple booked $24 billion of sales in China, "larger than any technology company in the United States that we're aware of." And with over 50 percent of iPad buyers in China and Brazil being first-time Apple customers, Cook believes these customers will also return to buy phones and computers and media.

Can Apple continue to outgrow the rest of the industry?

Cook was mum about specific plans for the future. "Obviously we're looking at new categories — we don't talk about them, but we're looking at them," he said. On challenges from Samsung and other Android manufacturers, he questioned whether the market share figures floated were perfectly accurate. "It is clear that Android is on a lot of phones," he said, and "it is probably true that iOS is on a lot more tablets."

Success is not making the most."

But Cook also sidestepped the market share question. "Success is not making the most," he said. For Apple, market share is only important in getting the critical mass needed to create a powerful ecosystem — which Apple certainly has. "There's a button or two we could press to make the most," he said, but "that would not be good for Apple."

The shareholder meeting was largely straightforward, mostly because Apple pulled a controversial proxy proposal to change the way it issues preferred stock after a judge ruled in favor of activist investor David Einhorn's motion for an injunction. Einhorn's formal complaint was that the preferred stock proposal was bundled with unrelated governance issues, but he also wants Apple to consider issuing a preferred stock with a permanent dividend.

"I strongly believe it was a silly sideshow, regardless of how the judge ruled."

Tim Cook had earlier called Einhorn's lawsuit against Apple "silly" and "a sideshow." When asked at the shareholder meeting whether he still believed that was true, Cook said, "I absolutely do." Cook added that "I strongly believe it was a silly sideshow, regardless of how the judge ruled," but noted that "I don't think the issue of returning cash to shareholders is silly — we're seriously considering it."

In fact, Cook only made one definitive statement on Apple's future: construction on the company's new campus is well underway and should be completed and ready for employees to move in by 2016.