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TheStreet Open House

Apple's Not a Hardware Company: Tech Weekly

NEW YORK ( TheStreet) -- Apple (AAPL) was firmly in the spotlight again this week following CEO Tim Cook's comments at the Goldman Sachs Technology and Internet conference on Tuesday.

Despite the phenomenal success of the iPhone and iPad, Cook used a question-and-answer session with Goldman analyst Bill Shope to explain that Apple's more than a mere hardware company.

"Because we're not a hardware company, we have other ways to make money and reward shareholders," he said, 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 noted 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."

The Apple CEO, however, gave no hints about rumored products such as the "iCar" and "iWatch" during the 59-minute discussion.

Cook, however, took a swipe at PC giants such as HP (HPQ) during the San Francisco event, explaining that the tablet market still represents a huge opportunity for Apple.

Inevitably, Cook 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."

Cook described the lawsuit as "a silly sideshow" and a "distraction," but reiterated Apple's prior commitment to "thoroughly" evaluate and consider the Einhorn proposal.

Later on Tuesday, Apple filed a proxy statement following Cook's comments about Einhorn's preferred stock proposal and subsequent lawsuit.

Also this week, it emerged that legendary investor George Soros added to his Apple stake during the fourth quarter. Einhorn also added to his Apple stake.

On Wednesday, Apple also lowered prices and upgraded the processor on its 13-inch MacBook Pro with Retina display barely four months after its launch.

Apple shares ended the week down 3.12% at $460.16.

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