Apple's (AAPL) CEO Tim Cook rebutted criticism on Tuesday that his company was too tight-fisted with its $137 billion cash pile, saying the tech giant "does not have a Depression-era mentality" that prevents it from returning money to shareholders.
Wading into a controversy that was bought to a head last week by fund manager David Einhorn, Cook touted his company's investment in product development and research. The CEO rejected the basis of a lawsuit filed by Einhorn that the fund manager asserts will restrict Apple's ability to distribute its excess cash to its investors.
"Frankly I find it bizarre that we would find ourselves being sued for doing something that's good for shareholders," Cook told the Goldman Sachs' Technology and Internet Conference. He branded Einhorn's lawsuit as a "a silly sideshow."
Countering Einhorn's pointed criticism that the company was behaving like his cash-hoarding grandmother who lived through the Depression, Cook said his company invested $10 billion in capital expenditures last year, and would do the same this year.
"We do have some cash, but it's a privilege to be in this position ...where we can seriously consider returning additional cash to our shareholders."
He nevertheless said that Apple would "thoroughly consider" Einhorn's proposal to return cash to shareholders.
For his part, Einhorn managed to use his lawsuit to advance an issue that has dogged Apple for years. Analysts say the tech giant is notoriously parsimonious with paying dividends to its shareholders,magnified by the fact that the company's stock rose more than 31 percent in 2012.
In spite of sitting on a record cash haul, Apple's shares have swooned from a record high above $700 to new 52-week lows, as investors doubt the company's ability to keep pace with its competition. This week, speculation mounted that Apple would release a new watch.
Apple's culture of innovation "has never been stronger", Cook said on Tuesday, adding that it was "deeply embedded" in the value and DNA of the company. He insisted that the smartphone market would continue to be integral to the company's fortunes,based on growth trends in the all-important segment.
The company's dominance in the tablet space represents a bigopportunity for Apple, Cook stated, even as challengers line up to erode theyawning market share of its iPad and iPad Mini. Tablets are growing inpopularity, as consumers flock to the devices as an alternative to thetraditional personal computer.
"We're in the early innings of this game," Cook said,touting projections that the 120 million units sold last year will triple over the next four years.
Cook points out that Black Friday numbers showed customers used iPads and iPhones to shop far more than their Android counterparts ... "I'm not sure what people are doing with these other tablets."
Some Apple watchers have worried that iPad Mini sales will eat into demand for its larger, more expensive iPad - a process analysts refer to as cannibalization. Cook, however, dismissed those concerns, saying that such talk often accompanied the introduction of newer Apple products.
"The first time I got asked about cannibalization was when Apple came out with the iBook, and people were worried that it would cannibalize the PowerBook," the CEO said. "When we came out with the iPad, people worried it would cannibalize the Mac." Both the PowerBook and Mac rank among Apple's most popular products.
( -- Jon Fortt contributed to reporting for this article from San Francisco.)
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