Carl Icahn and Apple: Frustration, Action, Acceptance, Optimism

Updated from 10:04 a.m. ET to include statement from CalPERS

NEW YORK (TheStreet) - Carl Icahn believes Apple (AAPL) CEO Tim Cook will increase the company's share repurchase activity and sees no reason to continue to press a shareholder proposal to increase its annual share repurchase authorization to $50 billion.

In a letter to Apple shareholders, Icahn said he was disappointed Institutional Shareholder Services recommended against his increased buyback proposal, especially since Apple CEO Tim Cook recently projected a share repurchase program almost in line with his $50 billion-a-year proposal.

What Icahn had been calling for was an additional $18 billion-a-year to Apple's rate of annual share repurchases. A February disclosure by Tim Cook that Apple had bought $14 billion worth of stock in the wake of the company's first quarter earnings, however, indicated that both Icahn and Cook were basically on the same page about share repurchases.

"As Tim Cook describes them, these recent actions taken by the company to repurchase shares have been both "opportunistic" and "aggressive" and we are supportive. In light of these actions, and ISS's recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target," Icahn said.

The activist also hinted that he is now more interested as an investor in the products that Apple will unveil in 2014, which could range from wearable devices to innovations surrounding mobile payments and even an expanded Apple TV product.

The California Public Employees' Retirement System (CalPERS), a vocal institutional Apple shareholder, said on Twitter it "applauded" Icahn's decision to drop his proposal on Monday. Previously, the retirement fund had criticized Icahn's proposal.

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