April 27, 2006 2:57 PM PDT

Shareholders take stock of Apple

CUPERTINO, Calif.--Apple Computer CEO Steve Jobs defended his company's environmental practices during the annual shareholder meeting, but also took time to reflect on market share and the Mac maker's transition to Intel chips.

Shareholders gathered at Apple's campus here on Thursday to vote on three proposals this year. Preliminary voting indicated that shareholders approved proposals to re-elect Apple's board of directors and to extend its contract with its auditor, KPMG.

However, they did not approve a shareholder proposal to require Apple to set recycling goals, based on preliminary voting. The final voting results will be announced when Apple files its 10-Q report with the Securities and Exchange Commission.

Jobs said Apple now ranks somewhere between Hewlett-Packard and Dell when it comes to recovering old computers, based on the percentage of sales that each company recovers.

"We're a little better than HP, and a little worse than Dell," he said.

The tone of the recycling debate this year was far more cordial than last year, when protestors gathered outside Apple's headquarters to criticize the company's recycling efforts, and Jobs compared the negative assessments of Apple's environmental record to cow excrement.

Part of the reason was that Apple recently announced a free computer take-back program that will allow new Macintosh owners to trade in their old Macs or PCs at Apple stores or through the mail. The company currently accepts free trade-ins at its offices here and offers a recycling service for a fee, but will start the free program in June.

But Jobs still faced questions from investors who wanted him to set a numerical goal for Apple's recycling program. He declined, but noted that the company has all but eliminated harmful CRT (cathode ray tube) monitors from its product line, with the eMac the only remaining Mac that comes with a CRT display. "We might be sitting here next year with none," while other PC vendors continue to sell CRT monitors that are responsible for a great deal of pollution, he said.

In other perennial concerns, investors asked Jobs why Apple hasn't captured a larger percentage of the PC market given the runaway success of the iPod. "We would like to increase our market share, and the Intel switch will help us do that," Jobs responded. He said the transition is going more smoothly than he had envisioned, compared with past transitions like the move from 680x0 processors to Power PC processors or the move from Mac OS 9 to Mac OS X.

Apple acknowledged that it has felt some mild pain from flat sales as some customers wait for the wholesale conversion of the product line to Intel's chips. But once that is completed by the end of this year Mac growth should improve, Jobs said.

"Each point of market share means $2 billion in top-line revenue," said Peter Oppenheimer, Apple's chief financial officer, who joined Jobs onstage to field questions from the audience.

One investor asked Jobs to respond to worries that his new position on Disney's board of directors, following that company's acquisition of Pixar Animation Studio, would detract from his attention to Apple. He said the opposite was true, because his responsibilities as a Disney director would actually allow him more time to concentrate on Apple than he had as CEO of Pixar.

Jobs and Apple seem more worried about the macroeconomic environment than the health of the PC market, which some analysts feel is in line for slower growth this year.

"One of the nice things about having 4 or 5 percent market share is you don't really care if (the PC) market is down," he said. But the overall state of the consumer economy does have a big effect on Apple's fortunes, he said, noting that "$70 a barrel oil has to catch up with us at some point."

The CEO also fielded a few questions that he probably doesn't get very often. He doesn't plan on running in San Francisco's upcoming annual Bay to Breakers race this year, joking "I probably wouldn't finish if I did." And a shareholder who works for local jazz station KCSM appeared one step closer to getting the station's audio feed listed on iTunes.

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Steve Jobs, shareholder, market share, Apple Computer, Pixar Animation Studios Inc.

6 comments

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Macintosh Media Center?
When asked about a media center, Jobs replied, "We hear you loud
and clear." He also said to expect "an exciting new television ad
campaign that will begin airing next week." Are the two comments
related?
Posted by CBSTV (780 comments )
Reply Link Flag
Appeared to be separate comments
The questions were asked by two different shareholders, one guy wanted a Mac OS-based Media Center-like thing he could plug into a big plasma TV, while the other question was asked by a man who thought Apple should have 35 percent market share. The questions were several minutes apart, and the responses didn't appear to be related.

I was surprised Steve didn't bring up Front Row in response to the first question, so who knows, maybe something else is coming soon. But those responses above didn't come one right after another.
Posted by Tom Krazit (436 comments )
Link Flag
Secret new products
"The new products in the pipeline are the best Ive ever seen in my
life.

Interesting.
Posted by dotmike (154 comments )
Reply Link Flag
As opposed to what?
Did you expect him to say they have a medicore pipeline? Has Steve ever been modest?
Posted by J. Blow (193 comments )
Link Flag
Recycle? Send them to 3rd world countries
Just send those Macs to third world countries and link up with the users groups!

We need those computers and have the cheap labor to fix them up and donate them to public schools, street children shelters, orphanages, and more!

If its working, even if its just a Mac SE, we can fix it up and some kid will love it! And further down the road, that's another Mac user for Apple's future!
Posted by Maccess (610 comments )
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