Apple CEO Ducks Questions on Music Strategy
Thu April 24, 2003 03:57 PM ET
By Duncan Martell
CUPERTINO, Calif. (Reuters) - Steve Jobs, chairman and chief executive of Apple Computer Inc. AAPL.O , declined to comment on its forthcoming online music service and its reported talks to buy Vivendi's Universal Music label at the computer maker's annual shareholder meeting on Thursday.
"There have been a lot of rumors in the last few weeks," Jobs said in response to a shareholder question. "Many of them are not true and some of them are true."
Apple, based in Cupertino, California, is readying to launch an online music service, which will allow for users to buy single songs from a deep catalog, record industry sources have told Reuters. The service has already won the praise of some record executives who see it as a potentially powerful weapon against online privacy.
In a further confirmation, Apple sent invitations earlier this week to reporters to an event in San Francisco on Monday, noting that it would be "music to your ears."
Asked by one shareholder if Apple were indeed going to launch such a service, Jobs responded: "You'd think so if you haven't been asleep the last two weeks."
"We really can't talk about unannounced products," he said later, in response to a question regarding the Vivendi V.N EAUG.PA> talks about Universal Music Group, home to acts such as Eminem and U2.
Jobs last week denied Apple had made a bid for Vivendi's Universal Music Group record label, but he did not clearly deny that the two parties were in acquisition talks.
Apple, under the direction of Jobs, has been pitching Apple computers as the "digital hub" of a digital lifestyle, and analysts said an acquisition of Universal assets, plus Apple's own online music service due as soon as next week, are an obvious extension of that strategy.
Apple has made digital entertainment, with its iTunes and iMovie editing and recording software, central to its strategy. The company did not Webcast its annual meeting.
In response to a question about when Apple may return to the days of paying a 10-cent to 12-cent a share dividend, Chief Financial Officer Fred Anderson said that unless the U.S. Congress acts to cut taxes on shareholder dividends, an increased dividend would be among "the least effective ways" to return money to shareholders.
Apple had $4.53 billion in cash, cash equivalents and short-term investments on its balance sheet at the end of the most recent quarter.
Earlier this month, Apple reported net income that fell 65 percent from a year ago as revenue was little changed, but hit its own revenue target and profits were at the high end of Wall Street's expectation.
Jobs, in his concluding comments, said that morale at Apple is "very high," adding that, "I have never seen folks at Apple work as hard as they are now."
"I think we are leading this industry in innovation," Jobs said.
"Hopefully things will start to turn around at some point," Jobs said, referring to the weak economy and slack demand for computers and high-technology products in general.
Shares of Apple fell 15 cents to $13.43 in late trading on the Nasdaq.
Things Ain't What They Seem!
Things Ain't What They Seem!