The company went 7 for 7, getting all 3 of its proposals approved while rejecting the 4 shareholder proposals.

The most notable shareholder proposal sought to end Apple’s DEI efforts but was rejected. As a result, Apple’s DEI initiatives will remain unchanged, diverging from the recent trend of Meta, Google, and Amazon reversing their positions. The key takeaway is that Apple remains committed to its culture.

As a side note, Cook stated during the shareholder meeting that Apple has never implemented hiring quotas or targets.

Apple does an excellent job of always selling. Anytime it has an audience, it capitalizes – whether at product launch events, quarterly earnings calls, or this year’s shareholder meeting.

This approach was on display as Cook spoke for 13 minutes, highlighting the strengths of the iPhone, Mac, iPad, Vision Pro, Services, Apple TV+, Retail, ESG initiatives, and custom silicon engineering. While there were no incremental updates in Cook’s prepared remarks, his comments remain valuable, as they reinforce the company’s commitment to excellence – something investors appreciate and expect Cook to consistently reiterate.

The company remains focused on devices, services, and AI, with an added emphasis on how its hardware approach will deliver AI experiences unique to Apple users, particularly in terms of security.

While Cook’s Q&A offered no major revelations, I found the following noteworthy:

1. Investing in the US: Cook recapped Apple’s $500B U.S. spending commitment.

• My take: the company is increasing its US investment by about $19B per year above its normal investment run rate. See our take on the announcement: Apple’s U.S. Investment is Stepping Up to Support AI and Avoid Tariffs

2. AI and privacy: Cook emphasized the importance of the Secure Intelligent Cloud, powered by Apple Silicon, and reiterated the company’s commitment to privacy across all products. This aligns with Apple’s strategy to lead in AI while staying true to its core values.

• My take: Consumer privacy is a competitive advantage for the company, and it makes sense they continue to to highlight it.

3. Dividends: Cook noted that an update on dividends will be provided after Apple reports its March quarter earnings, in line with the company’s standard capital return schedule. However, he did not indicate whether the dividend will increase, decrease, or remain unchanged.

• My take: Given the recent incremental increase in U.S. investment, I expect a similar annual dividend increase and a more modest rise in buybacks to be announced in the third week of April.
• As a point of reference, Apple increased its buyback authorization by $90B in 2022, $90B in 2023, and $110B in 2024. As of December 2024, the company had approximately $66B remaining for future share repurchases.
• Bottom line: I expect the annual dividend to increase by $0.01, in line with annual increases since FY21. As for the buyback, given the remaining $66B allocation, I anticipate an increase of $80B to $100B this year.

4. Health Innovation: Cook highlighted the Apple Watch and AirPods with hearing aid support as key examples of Apple’s contributions to health technology.

• My take: Not much new here. In 2019, Cook stated that Apple’s greatest contribution to mankind will be related to health. Despite being a small subset of the product segment, it remains a top investment area.

5. Inclusion and Diversity (DEI): Cook stated that Apple has never implemented hiring quotas or targets. However, he acknowledged that adjustments may be necessary to comply with laws and regulations while reaffirming Apple’s commitment to its core values.

• My take: Following the presidential election, Meta, Google, and Amazon have scaled back their DEI efforts. Apple’s decision to go against the tide demonstrates its commitment to existing values and approach, despite shifting corporate trends.

6. Apple Intelligence & Environmental Impact: Apple remains committed to delivering the best products with the least power consumption, ensuring efficiency in AI-related innovations.

• My take: Nothing new. This is consistent with what they’ve been saying for the past 6 months.

7. Emerging Markets & Middle East Growth: Cook noted that the iPhone installed base grew by double digits in these regions, outpacing the 6% global active device growth Apple reported last month. This serves as a strong reminder that emerging markets are a key growth driver for the company.

• My take: Greater China accounts for 19% of Apple’s total sales. The company has struggled in China for the past two years, with an average quarterly decline of 5%. Over the past six quarters, despite comps getting easier, the China business continued to be under pressure, declining by an average of 7% in each quarter. Collectively, Emerging Markets will supplement some of the weakness in China over the 1-3 year period. Longer term, countries like India could account for 10% of revenue, up from about 3% today, which would more than offset long-term China weakness.

8. India’s Market Potential: India, the world’s second-largest smartphone market and third-largest for computers and tablets, is a growing priority for Apple. The company plans to open four new retail stores this year, as mentioned in last quarter’s earnings call.

• My take: India currently accounts for ~3% of Apple’s revenue, but could grow to 10% long-term. For comparison, China represents ~18% of Apple’s revenue.

9. Future Product Roadmap: Cook reaffirmed Apple’s commitment to creating great new products, highlighting the upcoming iPhone 16e and Apple’s new C1 modem.

• My take: Apple needs to continue diversifying beyond the iPhone, which accounts for 56% of revenue and has declined by an average of 1% over the past two years. The easiest way to reignite iPhone growth is through Apple Intelligence, which I expect will set the stage for iPhone sales to accelerate from 1% growth in FY25 to 6% in FY26.
• Beyond the iPhone, I’m looking for new products to drive growth, including AirPods with cameras and smart glasses. These emerging segments could contribute an additional 1-3% to overall revenue growth in the coming years.

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