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Apple's TV 'Hobby' Becomes a Billion-Dollar Business

CEO Tim Cook says the company sold more than $1 billion worth of Apple TV set-top boxes in 2013.
Image: Apple TV device
An Apple TV device.Justin Sullivan / Getty Images file
/ Source: Reuters

CUPERTINO, Calif. — Apple Chief Executive Officer Tim Cook said the company sold more than $1 billion worth of Apple TV set-top boxes in 2013 and reassured shareholders at the annual meeting that the company is investing heavily in the next generation of products.

"We're working on some things that are extensions of things you can see and some that you can't see," Cook said at the annual shareholders' meeting on Friday, referring to a 32 percent increase in research and development costs last year.

Cook said Apple has acquired 23 companies in the last 16 months and remained on the lookout for interesting technology and companies. While Apple is not "in a race" to acquire the most companies or to spend the most money, that "doesn't mean we won't buy a huge company tomorrow afternoon," he said.

Apple will provide an update about how it will use its massive cash pile, which was nearly $160 billion at the end of last quarter, within the next 60 days, Cook said. The time frame is in line with previous comments that the company would announce its latest cash management plans around April.

Apple repurchased $14 billion in stock in a two-week period earlier this year, under pressure from activist investor Carl Icahn, who had been publicly calling for the iPhone-maker to buy back an additional $50 billion of stock above its existing buyback program.

Icahn withdrew a shareholder proposal for the buyback following Apple's announcement of the $14 billion in stock repurchases. Icahn in late January said that he held more than $4 billion in Apple shares.

Shareholders at the annual meeting at Apple's Cupertino headquarters on Friday re-elected all of Apple's board members.

Some investors have expected Apple to unveil a wearable device, such as a smartwatch, or a newfangled television that integrates Internet capabilities. Cook did not provide any details on new products during his presentation to shareholders, but said the company's existing $99 Apple TV set-top box — long referred to as a "hobby" by Apple executives — had racked up $1 billion in sales in the past year.

"It's a little more difficult to call it a hobby these days," Cook said.

In response to a shareholder question about innovation, Cook said that Apple preferred not to tip its hand about new products under development so as not to tip off the competition.

"You can see we're getting ripped off left, right and sideways," he said.

— Reuters