This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Apple's Cook Touts Software, Apps at Goldman Conference

NEW YORK ( TheStreet) -- Despite the phenomenal success of its iPhones and iPads, Apple (AAPL - Get Report) isn't a mere hardware company, according to CEO Tim Cook.

Speaking at the Goldman Sachs Technology and Internet Conference in San Francisco on Tuesday, Cook said that "because we're not a hardware company, we have other ways to make money and reward shareholders," adding that Apple generated $3.7 billion in software and services revenue last quarter. "If you look at that compared to software and services companies, it's an incredible amount of revenue."

Cook pointed out that the purchase of an Apple device opens the door to additional revenue for the company. "We don't look at the sale of a product as the last part of our relationship with a customer," he said. "It's the first."

From iTunes to the company's ever-growing App store, Apple has a host of highly lucrative non-hardware products in its arsenal. In 2011, the company also launched iCloud, touting services such as cloud-based document storage and iTunes in the cloud.

There have already been a mind-boggling 40 billion downloads from the company's App Store, which boasts over 800,000 apps. Underlining the sheer scale of the ecosystem, Cook explained that Apple has paid $8 billion to developers. "That's an unbelievable number," he added.

Cook also took a swipe at PC giants such as HP (HPQ - Get Report) during his presentation, explaining that the tablet market still represents a huge opportunity for Apple.

Apple, he noted, sold 23 million iPads during its recent fiscal first quarter. "To put the 23 million in some context -- HP, which is the world's largest PC seller, in that quarter sold 15 million PCs," he said. "Last year there were more iPads sold than HP sold of its entire PC lineup."

Although tablets have traditionally been perceived as a different breed of device, tech research firm Canalys recently counted tablet computers among PC sales, noting that Apple's the dominant player in the space. By Canalys' definition, one-in-six PCs shipped in the fourth quarter of 2012 was an iPad.

Cook spoke for 59 minutes during his eagerly anticipated appearance at the conference, answering a series of questions from Goldman analyst Bill Shope.

Inevitably, the Apple CEO was quizzed on hedge fund manager David Einhorn's decision to sue Apple. The Greenlight Capital president wants his fellow shareholders to vote against Apple's proposal to do away with preferred stock, which he says restricts "the board's ability to unlock the value on Apple's balance sheet."

Last week, Apple issued a statement responding to Einhorn's letter, saying it will "thoroughly evaluate Greenlight Capital's current proposal to issue some form of preferred stock. We welcome Greenlight's views and the views of all of our shareholders."

Cook, however, described the lawsuit as "a silly sidehow" and a "distraction" during his presentation at the Goldman Sachs conference.

"My preference is that both parties would take the money they are spending on this and donate it to a worthy cause," he added.

Nonetheless, the CEO reiterated Apple's prior commitment to "thoroughly" evaluate and consider the Einhorn proposal.

Apple shares dipped 1.4% to $473.13 on Tuesday.

-- Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
HPQ $33.40 0.00%
FB $79.19 0.00%
GOOG $532.11 0.00%
TSLA $250.80 0.00%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs