updated 07:05 pm EDT, Thu June 7, 2012
Oppenheimer, Cue hold court on company's views
Investment management company Sterne Agee recently hosted a meeting with Apple's Chief Financial Officer Peter Oppenheimer, and Eddy Cue, senior vice president of Internet software and services. Uncharacteristically, the two men answered several questions in regards to the company's advantage over rivals. They also expressed their views on contentious technical issues in today's market, including carrier subsidies, and its rocky relationship with Samsung.
Similar to Apple's position during it's quarterly earnings conference call, Apple believes that a $400 subsidy is minor when a carrier can collect nearly $2,000 in revenue when signing a customer up for a contractual two-year period. Furthermore, iPhone customer annual "churn", or departure, rate is less than two percent, ensuring a steady customer base unlikely to depart for another carrier.
Apple's officials stressed that Samsung is both a "pain" as a competitor but "works well" as a component supplier. Samsung is the primary supplier on the new iPad screen, as well as the A-series of processors found in the entire iPhone, iPad, and current iPhone lines, so divestiture of any Samsung offering isn't likely in the near term. Apple had looked at investing in Sharp as an alternate supplier of iPad screens, eventually letting Foxconn make the investment instead. Apple is embroiled in several legal disputes with Samsung in the United States as well as Germany, among others.
Apple's weakest link in corporate strategy is by far the enterprise market. Cue and Oppenheimer commented that it is adding to the business sales team, spending on the value-added reseller network, adding briefing rooms for sales presentations to the retail stores, and adding business services to the Apple offerings. A specific remark was made about not providing custom hardware models for business like other providers, and is instead choosing to provide the same product lines for both consumer and enterprise markets.
Apple remains committed to its HTML5 support, as well as the iCloud initiative. The two run hand in hand, with HTML5 apps being used in conjunction with native iOS and Mac OS X applications.
As a result of the meeting and question-and-answer session, Sterne Agee saw "no change to our upbeat view" of Apple's future earnings. Apple stock remains one of its top picks.