Despite the sharp decline in Apple's share price since the beginning of the year, the tone of the question-and-answer session at this year's shareholder meeting was more cordial than in the past.
Apple CEO Steve Jobs fielded several wide-ranging questions from Apple shareholders Tuesday at the company's annual meeting, covering ground from the iPhone to the plans for a post-Jobs Apple.
For the most part, Apple's shareholder meeting is just as boring as anyone's. This year was a little more interesting, as a non-binding shareholder proposal was approved advocating that the board of directors give shareholders input into executive compensation. But the most compelling part of the meeting was the hour or so in which Jobs, COO Tim Cook, and CFO Peter Oppenheimer fielded questions from a wide range of shareholders inside Apple's headquarters in Cupertino, Calif.
A quick runthrough:
Jobs answered a question from an Apple developer about the iPhone promising,"You'll see a lot of apps out there this summer." Apple plans to hold another event in Cupertino this week, as it reveals some of the details behind the iPhone software development kit.
It's been unclear whether Apple is actually planning to release the kit on Thursday, or just explain how iPhone application development will work. Jobs' statements seem to suggest there will be some time between the formal release of the SDK and the arrival of applications, giving some credence to a report that Apple plans to serve as a clearinghouse for iPhone applications created using the SDK.
It's been an open question for years: what will Apple do if Jobs decides to retire or falls ill? It's hard to imagine another company--at least in the tech industry--whose image is tied so closely to that of its CEO.
Jobs avoided directly answering a question about Apple's succession plan. However, "we talk about it a lot," he said, and noted that it's the board of directors job to "make sure everybody is a potential successor to me," referring to Apple's senior management. Cook generally operates as the No. 2 at Apple, running the company's logistics, answering questions during earnings calls, and speaking on its behalf at investor conferences. But he lacks Jobs' stage presence, and it's difficult to envision him keynoting Macworld with anything like Jobs' penchant for the spotlight.
Turning back to the iPhone, don't expect support for Adobe's Flash technology anytime soon. The full-blown PC Flash version "performs too slow to be useful" on the iPhone, and a mobile version called Flash Lite "is not capable of being used with the Web," Jobs said. Without an option that falls in between, it sounds like Flash is not going to be supported on the iPhone until the performance of the underlying hardware improves.
And in other iPhone items, Cook fielded questions about Apple's negotiations with China Mobile, which he said consisted thus far of just "one conversation." Several reports have emerged about talks between Apple and China Mobile, especially as we've learned just how many unlocked iPhones are running in China. "I'm certain we will be in China one day" with official iPhone sales, Cook said, but declined to give an update on that schedule.
Jobs tersely turned aside a question regarding whether Apple was planning to develop a product based on Xserve for consumers, sort of like what Microsoft and HP are doing with the Windows Home Server product. "We don't comment on unannounced products," he said.
Apple, of course, never comments directly on unannounced products, but sometimes Jobs will expound on the virtues or pitfalls of a particular market, or usage case, or product concept as he sees it. This time, he just shut down on the topic, which will automatically get the buzz going as to whether or not this is something Apple is actually considering putting together. For years, Jobs dismissed such topics as video-player iPods and Apple-designed mobile phones, and we see where the company has taken those ideas.
A question somewhat tangentially related to the MacHeads movie asked Jobs whether the company's runaway success of the past several years has broken the bonds between the company and the longtime Mac community, and whether Apple "still cares" about these people. Some of these folks see Apple as the local rock band that made it big, losing some of its innocence and humility along the way.
Jobs acknowledged, "We have a lot more customers now." There has been some angst among longtime Apple users that the company is getting away from its Mac roots with projects like the iPod and the iPhone, which manifested itself during some early problems with Leopard, the latest version of Mac OS X.
But "we do care...We drop the ball sometimes, when some of those customers have a problem, but the vast majority do well" with their Apple experience," he said, citing high customer satisfaction ratings.
Finally, Oppenheimer responded to a question about Apple's exposure to the tanking market for auction-rate securities, which has hurt companies outside the financial sector such as JetBlue who invested some of their current assets into those types of securities. Apple has no exposure to that kind of problem, he said, but admitted "these are concerning times we're in."
Oppenheimer avoided giving a forecast on the economy in January during Apple's earnings presentation, saying "we'll leave the economic forecasting for others," but his comments Tuesday are indicative of the gloom that seems to be settling over the business community.
I was surprised that there weren't more questions about the drop in Apple's stock price since the beginning of the year. The past two years, Jobs has been able to avoid prolonged criticism over the company's stock-options backdating scandal at the shareholder meetings because so many shareholders were delighted with the company's performance.
Only one question was posed about the recent swoon, from an investor who wanted to know why Jobs didn't release a letter to shareholders like the one he did to employees, urging them to keep their heads up in the face of a sharp decline in Apple's stock. Jobs said he believed his management team's job was to focus on managing the company's employees, not its shareholders.
And truth be told, the drop in Apple's stock price seems to have more to do with the health of the overall economy than anything Apple is doing, other than some recent concern over iPhone sales. Jobs may be one of the most powerful executives in technology, but there's not much he could have done about the effects of subprime mortgage crisis that are causing much of the current concern.