Today's Apple Shareholders Meeting

I drove down to Cupertino for the Apple Inc. shareholders meeting today. I've been to more than half of them since becoming a shareholder in January of 1998 and it's always worth the trip.

I had a chance to talk briefly with CFO Oppenheimer after the meeting about international sales trends. They've been fantastically successful in the US, but compared to other companies and industries, Apple really isn't doing a good job of increasing international sales. US growth is greatly lagging the international growth of other multinationals, but until this latest quarter, Apple's US growth was better than their international growth.

Oppenheimer is really happy with Asia/Pacific sales (while I'm more impressed with the company's performance in Europe). They're doing well in all regions except for Japan. He blamed Japan's poor sales on a poor consumer spending there. He says they aren't losing market share in Japan and the iPod has 50% marketshare in Sony's backyard. (I don't expect Japanese sales to pick up much until the Yen carry trade unwinds substantially and strengthens the Yen.)



During the meeting, there was a lot of glowing praise from evironmental types (including Greenpeace) and two shareholder proposals were withdrawn as a result of meetings with Apple and Steve's letter last week. Steve was pretty critical of the environmental groups, basically saying they cared more about schmoozing and BS policy statements then about the facts of what companies were really doing.

There was also a lot of crticism from various union based groups (including AFL/CIO and the teamsters) over the stock options scandal. It was part of a big, national, political issue for them and a good opportunity to climb up on a soapbox. Steve got really defensive and showed a glimpse of his legendary angry side. He dodged questions, intercepted one intended for the head of the compensation committee and generally stonewalled on the issue. Among other things:

-When asked if he'd give back to Apple the differential that resulted from the backdating, he stuck to a line that the board had approved options back in October at a better price than he originally got and that he was willing to let Apple keep the difference. (dodging the issue of what should legally have been the price given the timing of the actual grant)

-When presed further on his compensation he gave the one liner that he gets paid 50 cents just to show up and the other 50 cents is based on his performance. (ignoring the hundreds of millions he's already realized in gains on the restricted shares after they were converted from tainted options)

-He stuck to the line that the SEC was happy with Apple's response, and that you'd have to believe in a grand conspiracy theory about the SEC to think that Apple or he had done anything wrong. (Well, it's no conspiracy theory. The SEC's stated purpose is to protect "investor confidence," not investors. In this case it means protecting people's confidence in Apple the company and blaming Heinen and Anderson as scapegoats.)

-After saying that Apple had been cleared, he read another statement from the SEC implicating Fred Anderson for not recognizing that the grants were improper. (hmm, nothing has been done wrong and the CFO should have recognized that something was done wrong... nice legal defense)

Steve knows he screwed up, he regrets it, he's getting away with it, he's not going to do it again, time to move on.



Other notes... Apple is weighing the pros and cons of opening up the iPhone to 3rd party developers. (My personal guess is they hope to monoplize applications for a device they expect to be extremely successful, or at least keep a very tight control on what gets released by others.)

When pressed on the lameness of dot.mac offerings he said they're making a big effort to improve it. (I'll believe it when I see it.)

When a user and big fan of Apple TV expressed disappointment that higher definition video's weren't available and a desire to "rent" videos, Steve gave a really big smile and response that made people think that those projects were in the works.

On the way home I thought of a million other things I should have asked Oppenheimer. Oh well, there's always next year.

Good stuff Roger, keep it coming