A lawsuit filed by shareholder Greenlight Capital about tapping its $137 billion cash pile “is a silly sideshow,” he said, because he and top executives of the world’s most valuable technology company are considering means to deal with it.
Cook, making a 60-minute appearance at the Goldman Sachs Technology Conference in San Francisco, declined to divulge any details about future products, saying “That would be giving away the magic,” but addressed concerns that growth for the Cupertino, Calif., company is slowing.
The Apple CEO made his presentation early Tuesday so that he could fly to Washington, where he’s scheduled to attend President Barack Obama’s State of the Union address and sit alongside Michelle Obama.
Cook said price cuts for older models of the iPhone for customers who can’t afford the latest iPhone 5 have generated huge demand. Last quarter, supplies of the iPhone 4 ran out, he said. Apple has already shipped more than 700 million iPhones and sees demand growing worldwide.
Similar price cuts for the successful iPad led to the iPad Mini, which Cook said brought in new customers who were price-sensitive. “We want to do a great product,” he said, “without worrying about how we set a great price for it.”
Introducing the lower-cost iPad Mini last year may have looked like “cannibalization” of the iPad itself, Cook explained. “But if we don’t cannibalize it, someone else will.”
Having the iPad Mini along with the iPad only benefits Apple, Cook said, by adding to apps, customer feedback and higher sales. Apple plans to continue to be price-sensitive so that it can attract new customers worldwide, he added.
Meanwhile, he said Apple will keep tapping its skills to make "magical products," Cook added, promising, "We'll never make a crappy product."
Cook said Apple plans to make Turkey the 13th country with an Apple store this year and add at least 30 more stores to the 400 it has now. The concept has been “a huge success” with customers and attracted 370 million visits last year.
Indeed, Cook said that whenever he felt down, "I visit an Apple store and it's like Prozac! It gives you a feeling like no other."
Earlier, Cook said he won’t “campaign” against a challenge to management at Apple’s Feb. 27 annual meeting prompted by Greenlight Capital, the New York hedge fund managed by David Einhorn, that owns 1.3 million shares. Greenlight is urging shareholders to vote against a proposal to change bylaws in a move that he said would prevent the company from issuing preferred shares or other forms to reward shareholders.
“I find it bizarre,” Cook said, asserting that Greenlight’s charges are unfounded. If Apple decided to issue preferred shares or some other new security “of course we’d need to go to shareholders to get their approval.”
Einhorn wants Apple to issue $50 billion wotth of preferred shares that would carry a 4 percent dividend and trade alongside Apple common shares. He claimed that would be the best way to reward shareholders.
Apple's Cook said the company wouldn’t spend money on new mailings or other anti-Greenlight activities. Greenlight sued Apple last Thursday in U.S. District Court in New York. In response, the company issued a statement that it was “in active discussions about returning additional cash to shareholders.”
Cook also said Apple will be judicious in tapping cash for acquisitions, noting the company has made smaller ones almost every other month. “We’ll be deliberate and thoughtful,” he said, and likely not target large ones that don’t complement Apple strategies.
Cook, 52, also said he’d had “an incredible” first full year as CEO following the retirement and subsequent death of co-founder Steve Jobs. “I’m incredibly proud,” he said, complimenting Apple’s senior management and staff.
He also said Apple will continue to deal with labor issues concerning its contract workers in China, “where we’re going to do what’s right and just,” as well as with environmental problems, including using renewable energy for Apple data centers.
“It’s the privilege of a lifetime and humbling,” he said.
Shares of Apple fell $12.09 toclose at $467.84 after Cook’s talk. They’ve fallen 12 percent this year.