In Steve Jobs Theater, Apple shareholders eat the air, promise-crammed

Apple is planting seeds and rolling dice on a long, great roadmap of fantastic products that will blow you away.

From Mark Gurman’s report for Bloomberg Friday on Apple’s 2019 shareholders meeting:

Apple Inc. Chief Executive Officer Tim Cook said he has “never been more optimistic” about where the company is today and where it’s heading. In a pep talk to investors, Cook said the iPhone maker is “planting seeds” and “rolling the dice” on future products that will just “blow you away.”

Speaking at the company’s annual general meeting in Cupertino, California, Cook reiterated that the iPhone maker is still on track to double revenue from services in 2020 from the nearly $25 billion in 2016. Referencing speaking notes on an iPad, Cook touched on several of the company’s product categories.

He said eventually the goal is to lower the price on the $1,200 MacBook Air laptop with a higher-resolution screen and said there’s a “long, great roadmap of fantastic” products related to the Apple Watch and AirPods. He indicated that more health features would come to the smartwatch.

My take: Less talk, please, more objects of wonder and delight. But I wasn’t there. Eager to hear from those who were.

UPDATE: Tweets that caught my eye.





10 Comments

  1. Jonathan Mackenzie said:

    I don’t need or want Apple to release anything that is not ready. I waited a long time for the Apple Watch and even then it was not fully baked. I’ll happily wait as long as it takes if they have another magical product in their future.

    Plant those seeds, Tim. Roll those dice.

    4
    March 2, 2019
    • John Konopka said:

      The Apple Watch is an interesting example. True, the S0 Watch was not that great. Later software updates improved it. However, I suspect that Apple gained a lot of good information by releasing S0 when it did. In other words, Apple Watch 4 is as good as it is partly because Apple had another year of experience to build on with S0.

      1
      March 2, 2019
      • Jonathan Mackenzie said:

        Yes that’s a good point. And I loved my S0 Apple Watch, only replacing it this year. It was just obvious they weren’t quite done with it when it was released. I hope their next product is at least as polished as the watch when it is released.

        0
        March 3, 2019
  2. John Konopka said:

    From my notes:
    Apple is on track to double services revenue by 2020 (from 2016 base, I believe).

    Apple Pay has doubled year–on–year last quarter.

    360 million subscriptions. I believe that includes Apple Music and other subscription in the App Store.

    iPad doing great, he gave us several facts we already knew.

    Tim promoted Siri short cuts as something we should look into.

    AR Kit 2 has a big future. ( In the visitor center they had a scale model of the Apple campus on a table about 20 feet across. The model was plain white with some grid lines. The model was very rough. The land showed some gently rolling hills and the buildings were simple cardboard models. There was an assistant handing out iPads with a special AR app. When you pointed the iPad at the model it showed a fully rendered view of the campus with trees, grass, cars driving on the roads and buildings in full detail. If you poked at the buildings the roof lifted up showing the interior hallways and desks with little people walking about.Very cool. I wonder how hard it was to make all that content.)

    Mac had an all-time record year last year (he didn’t say if that was units or revenue). MacBook Air will get cheaper over time.

    Wearables are very hot. Watch and AirPods up +50% last year.

    Apple Watch is successful at saving lives. We were shown a video from a local news program (I think it was in the SouthEast US) about a woman who got an alert about a high heart rate and got emergency treatment that probably saved her life. Tim says that he gets letters like this all the time from people who were helped by fall detection or heart rate monitoring. That was moving. It must be amazing to get these stories every week, if not daily.

    $14B in R&D spending last year. 18 acquisitions.

    Investing in the US. $1B in Austin TX. Other investments elsewhere. (forget if I heard it here or elsewhere, but Tim said that Apple makes site decisions on the merits and doesn’t shop around for tax breaks [like Amazon]. )

    Committed to annual dividend increases, as he has said before. (Dividend increases are usually announced in May.) Tim pointed out that the dividend has almost doubled since it was first announced. Lots of applause for this.

    World Wide Apple runs on 100% renewable energy. There was no detail on this. I imagine that includes buying offsets where direct renewable use is not practical. Now Apple wants to start pressuring suppliers to do the same.

    Joined partnership with Malala fund.

    Everyone Can Code now in 5,000 schools.

    Over half of new hires are women or minorities.

    Promised a great road map for AirPods and Apple Watch.

    Making a lot of investments. “Rolling the dice.” I think what Tim was saying here was that they weren’t just funding obvious things like new displays for iPhones, but other things that might not pan out, but if they do they will be wonderful. He made the point that today we don’t know which will be successful and which won’t. (I recall the attempt to grow sapphire boules to make iPhone covers as one that didn’t pan out. But good on them for trying.) As a shareholder I’d be upset if they weren’t trying all sorts of new things, even some far out ideas. The difference between Apple and some others is that Apple doesn’t announce their moon-shot projects.

    Craig Frederighi made a cameo appearance and answered a question saying that a software update will allow video out from the USB-C port on the iPad Pro.

    Tim called out Lisa Jackson and Dan ___ for working on incorporating more recycled materials into Apple products. Their long term goal is to only use recycled metals and such so that they won’t be required to use mined metals from questionable areas. I was very happy to hear that. I didn’t see this mentioned in press reports but this kind of corporate responsibility is a credit to Apple.

    There was a long discussion about privacy. Tim said it is not a marketing thing but part of who they are. He talked about this from several perspectives. One was the issue of health records. VA patients can now keep all of their records on their iPhones. in this instance privacy is an extremely important feature. This was a good segment.

    The even was scheduled to end at 10:00AM. Actually ran till 10:13AM. I think Tim took a few more questions to make up for the time taken on the political discussion.

    There was a right wing crank who put up the shareholder proposal asking for an ideological test for new board members. It was apparent that he didn’t care about making Apple better or improving the business. He was upset about some humanitarian stands Apple had taken. From some overheard snippets of conversation I heard later I think he was happy at the publicity he got. The voting result of 98.3% to 1.7% against his proposal was greeted with loud applause. To his point, I would be interested in Apple adding other board members. Apple has such a global reach they should get a few board members from Europe, Africa and Asia. It would be awesome to get Angela Merkel as a board member after she steps down as head of Germany. I know nothing of her skill set but her experience navigating European and world politics would be invaluable for Apple.

    Overall this was a “big picture” meeting. Most of the discussion was about Apple’s character and morality. Look at the topics covered – 100% renewable energy, goal to use only recycled materials and metals, strong stand on privacy, strong stand on diversity and treating people fairly, supporting education. I think it was quite a good discussion. Somewhat different from prior years. It shows Apple positioning itself to be a participant in the modern world. Apple Is at the forefront on many of these issues, not dragged along kicking and screaming like some others.

    10
    March 2, 2019
    • Fred Stein said:

      Thanks John for all the details. Better than any of the pros I’ve read. Gems:

      1. Apple Pay doubling:4 and 1/2 year from launch is amazing. Deals with Goldman and AliPay / Ant Financial hint that Apple can expand into other areas of financial services.

      2. ARKit has great potential for content and games optimized for Apple’s devices. Forget VR. Apple has first mover advantage as an AR platform,. Note that Apple’s App Store out performs Google Play 2 to 1 in terms of revenue for App developers and Apple.

      3. Wearable up 50% +

      4. All the green and social responsibility initiatives

      Joseph, thanks for citing the ‘hypothetical young gay man’.

      And much more to warm my heart and sooth my financial anxieties.

      1
      March 2, 2019
    • Ralph McDarmont said:

      Absolutely excellent and detailed summary. Thank you John Konopka.

      0
      March 4, 2019
  3. Good reporting by a shareholder from a sister site, reposted with permission:
    – – – –

    Tim first shared the basic numbers. Record sales/revenue up 9% or 22 Billion. He went through all the product lines and then got to Q&A.

    The first question was about USB-C and the ability to share video from an iPad through that port. The answer was it’s coming soon.

    Another question focused on wearables. This answer was quite interesting. Tim stated that ever since the Apple Watch 4 series which allows for users to run ECG to monitor their heart his emails from consumers has grown from a trickle to a stream of positive life saving notes. He said everything from a range of people falling and the watch contacting 911 to individuals who identified heart issues that they were unaware of. He shared that Apple is not only working on features that would identifying other potential serious health issues but will also be adding other health activities that could be monitored by other wearables (air Buds).

    When asked about how does Apple take risk to insure future innovation he again was very open with his answer. He said he wasn’t sure how investors would take this but they do not apply ROI’s on every project . Many will never see the day of light and some are 3-4 years out. He emphasized they are not a quarter to quarter company but was extremely confident that the next big thing will happen and may come from a number current projects.

    It was just a matter of time before someone asked a question regarding politics. He could not have answered it any better. He said we are in a very polarizing state. He emphasized that Apple works very closely with the current administration and we all have a responsibility to listen to each other and respect one another. He concluded by thanking all for attending and looked forward to seeing many familiar faces again next year.

    1
    March 3, 2019
  4. Jonny Tilney said:

    Next year I’ll be there too…!

    0
    March 3, 2019

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