Apple CEO Cook Sidesteps Shareholder Enthusiasm for Tesla

Apple CEO Tim Cook during an Apple special event at the Yerba Buena Center for the Arts on March 9, 2015 in San Francisco, California.

Apple CEO Tim Cook during an Apple special event at the Yerba Buena Center for the Arts on March 9, 2015 in San Francisco, California.

Photographer: Stephen Lam/Getty Images

Apple Inc. Chief Executive Officer Tim Cook, fresh from unveiling new details about the company’s first new device in five years, found himself facing shareholders eager for a marriage with Tesla Motors Inc.

“Quite frankly, I’d like to see you guys buy Tesla,” an investor told Cook on Tuesday at an annual meeting at Apple’s headquarters in Cupertino, California. The comment was followed by laughter in the audience and some applause.

Ever the diplomat, Cook sought to sidestep the question. “We don’t really have a relationship with Tesla,” he said, quickly pivoting to the subject of Apple’s in-car information and entertainment system, which he had also discussed a day earlier at an event to show off the new Apple Watch. “I’d love Tesla to pick up CarPlay. We now have every major auto brand committing to use CarPlay.”

Cook paused. “Was that a good way to avoid the question?” he asked. “Hey, there are some perks to being CEO.”

Still, investors weren’t done with the subject of Tesla, the electric-car maker run by Elon Musk. Another shareholder rose to talk about how he’s been a fan of Apple since putting a deposit down on its first computer in 1984.

“There’s something else I’m in love with that’s not Apple -- that every time I see it just blows my mind -- and that’s when I open my garage and see my Model S,” said the investor. “Am I insane to imagine something might happen here?”

The audience laughed.

“We’re very focused on CarPlay,” Cook said.

A Tesla spokesperson declined to comment.

Apple Car

While Apple hasn’t discussed plans to build a car, the company has been putting together a team to develop an electric vehicle, including hiring automotive-battery experts, for production as soon as 2020, according to people familiar with the matter. If Apple does decide to proceed with the idea and enters the car business, the company would be competing against efforts by Tesla and General Motors Co., both of which are aiming for 2017 to release electric vehicles that can go more than 200 miles on a single charge and cost less than $40,000.

The idea of an Apple-Tesla partnership has excited investors before. Tesla soared above $200 a share for the first time in early 2014 on speculation about the nature of a 2013 meeting between Tesla co-founder Musk and Apple’s head of mergers and acquisitions.

Recruiting Efforts

The two companies have also been in competition for talent. Tesla has more former Apple employees than from any other company, even carmakers, and Musk said that recruiting effort also goes the other way.

“Apple tries very hard to recruit from Tesla,” Musk recently told Bloomberg Businessweek in an interview. “But so far they’ve actually recruited very few people.”

The meeting followed an event Monday in San Francisco to showcase Apple Watch, the company’s smartwatch, first introduced last year and heading to stores next month. Optimism about the gadget, which can monitor health and fitness data, control music and display notifications when paired with an iPhone, has helped propel Apple shares to near-record prices in recent weeks. That was a change from last year’s meeting, when the stock was slipping and Cook was under pressure to jump-start sales growth and bring out innovative products.

Board Re-Elected

At the meeting, Apple investors re-elected directors to another one-year term on the board, which includes Cook; Chairman Arthur Levinson, who is also chief executive officer at Calico; Bob Iger, CEO of Walt Disney Co.; Andrea Jung, former CEO of Avon Products Inc.; former U.S. Vice President Al Gore; Ronald Sugar, former chairman and CEO of Northrop Grumman Corp; and Susan Wagner, a co-founder of BlackRock Inc. Mickey Drexler, CEO of J. Crew Group Inc., who had been on the Apple board since 1999, retired and his replacement hasn’t been named yet.

Cook also reiterated that the company is seeking to increase diversity on its board, and said it’s improving at the company. In August, Apple released employee-demographic data showing it’s slightly more diverse than some of its Silicon Valley peers. In the U.S., 70 percent of Apple’s workers are white or Asian, 11 percent are Hispanic, and 7 percent are black, the company said at the time. About 30 percent of its employees are female.

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