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Apple CEO says more breakthrough coming

Published: February 28, 2013 | 8:26 am
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CUPERTINO, Calif. — Apple chief executive Tim Cook sought to reassure shareholders worried about the company’s sagging stock price that the iPhone­ and iPad maker is on the verge of inventing more breakthrough products that will prove it hasn’t lost its edge.

‘‘The company is working as hard as ever, and we have some great stuff coming,’’ Cook told shareholders Wednesday before taking their questions during Apple’s annual meeting.

Cook provided no details but said the company is considering entering new product categories.

There has been speculation Apple is working on an Internet-connected watch or TV that will be introduced this year. One shareholder threw out an idea for Apple to ponder: a computerized bicycle. Cook, an avid cyclist, chuckled.

Wednesday’s meeting was less celebratory than in past years. Since hitting a record high of $705.07 five months ago, Apple’s stock has plunged 37 percent, wiping out shareholder wealth totaling $240 billion. Still, that exceeds the total market value of Microsoft Corp., the most influential company in personal computing until Apple ushered in an era of mobile devices with the iPhone in 2007 and iPad in 2010.

Cook, who became CEO shortly before Apple cofounder Steve Jobs died in October 2011, has a huge incentive to boost the stock price: The 1.1 million shares he owns are worth about $300 million less than they were five months ago.

Apple Inc. has not unveiled a trailblazing product since Cook took over, raising concerns about whether the company is losing the ingenuity that has set it apart. Cook told shareholders a commitment to innovation remains Apple’s ‘‘north star’’ and ‘‘the beat of its heart.’’

Apple’s stock shed another $4.40 to close at $444.57.

Preliminary results showed Cook was reelected to Apple’s eight-member board with 99 percent of the vote.

Wall Street may have been disappointed that Cook did not provide any further clarity on whether Apple will distribute some of its $137 billion in cash to shareholders as a dividend increase or one-time payment.

Shareholder David Einhorn, who runs Greenlight Capital, a 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, arguing that if approved, it would create a bureaucratic hurdle to returning cash to shareholders. He wants Apple to issue preferred shares with an annual dividend of 4 percent.

A potential showdown was averted last week when a federal judge ruled Apple had improperly bundled several corporate governance issues, including the handling of preferred stock, in the same proposal, which Apple withdrew from Wednesday’s agenda.

Supporters of the measure included the California Public Employee Retirement System.

Cook said Einhorn’s resistance to a shareholder vote on preferred stock remains ‘‘a silly sideshow, regardless of how a judge ruled on it.’’

Although Apple is selling more gadgets than ever before, the company’s profits and sales aren’t growing as robustly because of fiercer competition.


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