Every eye was on Tim Cook early this morning as he took the stage at Goldman Sachs Technology and Internet conference. While we can’t say there were any major surprises, Tim Cook spoke about Apple’s cash position, calling Einhorn’s lawsuit a “silly sideshow”, innovation and product cannibalization.
The first question he needed to address was the Greenlight Capital lawsuit and the preferred stock issue that has created so much hype over the past few days. Cook called Einhorn’s suggestion “creative” and said they are “going to thoroughly evaluate the proposal”. Yet Apple’s position is to not to waist shareholders’ money.
“I find it bizarre we find ourselves being sued for doing something that’s good for shareholders. It’s a silly sideshow, honestly. I think it would be a lot better use of funds to donate that time and money to a worthy cause. You’re not gonna see us do campaign mailing, you’re not gonna see a “yes on 2″ in my front yard. This is a waste of shareholder money, it’s a distraction, and it’s not a seminal issue for Apple.”
“I supported Prop 2, I’m gonna support it. It’s not something we’re going to spin cycles on. The serious issue on hand is the return of cash: how to do it, how much to do, and we’re very serious about that. But this Prop 2 thing is a silly sideshow. We feel so strongly for Apple that shareholders should approve any issuance of preferred stock.”
From Apple’s perspective, the depression-era mindset is out of the question, as the cash flow from operations was over $23 billion in last quarter alone. Also, the company is planning to return $45 billion to shareholders, and invest a couple tens of billions in retail, innovation, new products, and the supply chain.
In other words, lots of questions emerge as a result of Tim Cook’s presentation. Yet we need to highlight once again, as Cook did during the interview, that innovation is so deeply embedded in Apple’s culture, “it’s in the DNA of the company”. This is why Apple is acquiring a company every other month – for talent and or IP.
Even though Cook does not disclose the company’s future product plans, he spilled gas on the already hot cheaper iPhone rumour when talked about the iPhone. He once again highlighted the high demand for cheaper iPhones (Apple has lowered the price of the iPhone 4 and 4S) and highlighted that Apple is “making moves to make things more affordable”. His example related to the iPod and the Mac. When the iPod came out, it cost $399; now you can get an iPod shuffle for $49. Also, buyers shopping for a cheap computer can purchase the iPad mini for $329.
Apple’s focus is on building high-quality products and providing a fantastic user experience. Cook and Apple’s position on tech specs is pretty straightforward: Does it matter if you know the speed of the AX processor? “You want a fantastic experience.”
More on phablets and specs:
“When you look at displays, some people are focused on size. There’s a few other things about the display that are important. Some people use displays, the color saturation is awful. The Retina display is twice as bright as an OLED display. I only bring these points up to say there are many attributes to the display, and what Apple does is sweat every detail. We care about all of them and we want the best display, and I think we’ve got it. I’m not gonna comment about what we’re gonna do in the future, but it’s always broader than that which can be defined by a simple number”
In closing, here are Tim Cook’s thoughts about his first full year as Apple’s CEO:
I’m incredibly proud… I’m most proud of our employees. They’re there to do not only that great work, but the best work in their lives. They’re there to do it without limits, they’re the most creative in the world. It’s a privilege. I’m incredibly proud of the products, we have the best smartphone on the market, we have the best tablet on the market, we have the best digital music player on the market. For those things we elect to do, and we continue to focus on a few, they’re really great. I’m incredibly bullsih about the future and what Apple can do and more contributions it can make to the world.
I’m very proud that we’re out front, that we have a spine on supply responsibility. I’m incredibly proud that we’re doing heavy lifting with the environment, that we’re eliminating toxins. I’m proud we have the largest private solar farm anywhere, that we can run our data centers on 100% renewable energy. I don’t mean to gush, but it’s how I feel. It’s the privilege of a lifetime and humbling.