Alexei Oreskovic Cupertino, California
APPLE sold more than $1 billion (R10.7bn) of Apple television set-top boxes last year and was investing heavily in the next generation of products, chief executive Tim Cook said at Friday’s annual meeting.
Apple’s ability to transform the fast-moving technology arena is the central question on the minds of investors and Silicon Valley executives as the company’s growth slows, and rivals like Samsung Electronics and Google take chunks out of its market share.
Industry executives and Apple observers continue to believe that the company will come up with some sort of wearable device, like a smartwatch, and speculation persists about a television product of some sort to shake up the living room viewing experience.
“We’re working on some things that are extensions of things you can see and some that you can’t see,” Cook said, referring to a 32 percent increase in research and development costs last year.
Responding to a question about innovation, Cook said Apple preferred not to talk about new products under development so as not to tip off the competition.
“You can see we’re getting ripped off left, right and sideways,” he said.
Apple’s shares fell 0.27 percent to close at $526.24 on Friday. They have clawed back substantial ground since falling below $400 in June last year, but remain well below the record-high $700 level of 2012, weighed by concerns about whether the firm has any new hit products in the pipeline.
Though Cook steered clear of that discussion, he shed some more light on the Apple television business, which executives have long referred to as a “hobby” for a company expected to chalk up some $181bn in sales this fiscal year.
The $99 Apple set-top box, which streams content from Netflix and other video sources to a television, had racked up $1bn in sales in the past year, he said. “It’s a little more difficult to call it a hobby these days.”
Cook took pot shots at Google, saying that most users of its Android mobile operating system were using older versions, presenting a security threat. In contrast, 89 percent of users of devices based on Apple’s iOS had the most recent version of the software.
Shareholders re-elected all board members. In the run-up to the meeting, many investors had publicly debated whether Apple should not put any of its massive cash pile to better use.
Cook said the company would give an update within 60 days on how it would use the cash – nearly $160bn at the end of last year.
Apple repurchased $14bn in stock in earlier this year, under pressure from activist investor Carl Icahn, who had called for it to buy back an additional $50bn of stock on top of its existing buy-back programme.
Some analysts believe Apple may eventually buy something big. It has so far shied away from the mega-acquisitions that more aggressive rivals like Google have pursued, though Cook did not rule out forking over a cash if warranted.
Apple had acquired 23 companies in the last 16 months and remained on the lookout for interesting technology and companies. He warned shareholders not to focus too narrowly on short-term gains.
“If you’re in Apple for only a week… or two months, I would encourage you not to invest in Apple. We are here for the long term.” – Reuters