Apple (NASD: AAPL) fans are in unfamiliar territory, watching the stock price fall, while innovation seems to have stalled at the firm. While the sea may seem calm for now, Chief Executive Officer Tim Cook has promised more breakthrough products are on the way.
During the company’s annual meeting at its Cupertino headquarters, Cook told shareholders “The company is working as hard as ever, and we have some great stuff coming.” While Cook retained the firm’s typical secretive nature and didn’t relay any specifics at one point he did say that the company is considering entering other categories besides its popular line of digital music players, smartphones and tablet computers. This has led many to speculate that he was alluding to the Television project, which consumers are anxiously awaiting and have been speculating on for years.
Although there were more moments of levity, Wednesday’s meeting was less celebratory than the events in past years, when Apple’s stock price was soaring to the delight and enrichment of its shareholders. Cook, who became CEO shortly before Apple co-founder Steve Jobs died in October 2011, has a huge incentive to get the company’s stock price strong again. Apple hasn’t unveiled another trailblazing product since Cook took over, raising concerns about whether the company is losing the ingenuity that has set it apart from the rest of the technology pack.
While Cook’s comments didn’t effect the stock price much or give insight into future products, shareholders remain anxious over the topic of dividends.
Apple shareholder David Einhorn, of the Greenlight Capital hedge fund, turned Apple’s cash hoard into a hot topic in the weeks leading up the meeting. He sued to block a proposal that would have required shareholder approval for Apple to issue preferred stock. Einhorn argued that if approved, it would create a bureaucratic hurdle that could make it more cumbersome to return cash to shareholders. He wants Apple to issue preferred shares called “iPrefs” that would yield an annual dividend of 4 percent.
A potential showdown was averted last week when a federal judge ruled that Apple had improperly bundled several corporate governance issues, including the handling of preferred stock, in the same proposal. Apple withdrew the proposal from Wednesday’s agenda, to the chagrin of two shareholders who said they would have voted for it.
The road ahead may be difficult for Apple – that is, unless they unleash yet another game changing product.
