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Apple's Jobs addresses critics, new product directions

At Apple's annual shareholders meeting on Thursday, chief executive Steve Jobs ran into some fresh sources of criticism and also commented on some new products and strategies, such as third-party iPhone application development and the future of the company's .Mac online services.

After appeasing environmentally friendly investors by publishing new commitments to publicize Apple's environmental work in driving non-toxic manufacturing and product takeback and recycling efforts, Jobs was introduced to a new bundle of critics: labor union managers.

Impassioned outrage from Brandon Reese, a representative of the AFL-CIO, was echoed by representatives of the Teamsters and Con Hitchcock, an attorney with Amalgamated Bank. According to the bank's website, Amalgamated is "the only fully union-owned U.S. bank still in operation," and "remains firmly committed to its role as partner to the labor movement."

An article in the San Francisco Chronicle written by Ellen Lee characterized the union speakers as representative of Apple's shareholders, but two proposals they advanced by the speakers were not supported by shareholders' votes.

A number of attendees at the meeting gasped in disbelief when a union representative tried to dramatically evoke Watergate by asking Jobs, "What did you know, and when did you know it?," in relation to backdated options.

Hitchcock described backdated options as a cancer eating at the company, while also noting that Apple no longer uses stock options incentives as part of its compensation plans for employees and executives. 

Jobs appeared eager to put the entire matter to rest, citing SEC statements that praised Apple for handling its backdating issues with prompt and transparent cooperation. He then moved on to other questions about Apple's future products.

On Apple's mobile phone strategy

When asked about the company's mobile phone plans, Jobs jumped at the opportunity to pull out an iPhone that had been hiding in his pocket. He went on to address the vast potential within the mobile market and expressed confidence in Apple's new product, but noted, "we're beginners, and we have a lot to learn." 

Other Apple executives, including COO Tim Cook, were also unreserved about showing off the iPhones they were carrying. Cook pulled out his iPhone after the meeting and casually flicked through a list of contacts with his finger. 

"A few of us have been using the iPhone a lot," Jobs said during his question and answer session. "If you wanted it back, you would have to pry it from our dead hands." 

Jobs said the company was on track to ship the iPhone next month, in part because of his decision to delay the launch of Mac OS X Leopard from late spring to early fall in order to devote development resources to the iPhone. "Leopard will be worth the wait," Jobs insisted. 

After being questioned about the amount of money the company invests in research and development, Jobs said Apple's capacity to deliver new products is limited only by its ability to find talented new employees capable of great work. "I wish developing great products was as easy as writing a check," he said. "If that were the case, then Microsoft would have great products."

On third-party iPhone apps

When asked about the iPhone's closed development platform and whether the company recognized the need of large institutions to build their own applications for the handset, Jobs replied that Apple was "wrestling" to balance the requirements for security and stability with the desire for custom application development.

The Apple co-founder provided less information about the future of Apple TV. When asked about the potential for movie rentals from the iTunes Store, Jobs responded by simply saying, "one never knows." 

On the future of .Mac

In response to a question about Apple's minimal efforts in updating its languishing .Mac online services —particularly in comparison to the rapid development in Apple's hardware, software, and retail business segments —Jobs admitted that .Mac had fallen behind. "We have not achieved our full potential," he said, adding that the company planned to soon release a new set of initiatives for .Mac. 

Apple has already announced some new features for .Mac in Leopard, including the sync of Dashboard items across Macs linked under an account, but the potential for .Mac integration to play a major role in both Leopard and on the iPhone has not been given a lot of attention. Jobs indicated Apple's Worldwide Developer Conference would shed more light on the subject next month. 

During the shareholders meeting, Jobs also entertained the suggestion that Apple could mimic Microsoft's strategy of offering developing nations Windows Starter Edition —a low cost version of Windows XP as an alternative to the much more expensive Windows Vista. "Do you think we should offer Mac OS 9?" Jobs quipped in response.

"I think Apple could sell the developing world Tiger while selling Leopard here," the attendee replied. Jobs paused for a moment and said that could be an option.