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Apple CEO Says Customers Have Been Slow to Pay with Mobile Phones

Consumers have been using mobile phones to pay for goods and services at the cash register more slowly than expected, Apple (NASDAQ:AAPL) CEO Steve Cook told shareholders at the company’s annual meeting on Tuesday, Feb. 13.

The annual meeting was the first one held at Apple’s new Cupertino, California, campus, which some people have nicknamed the “spaceship” due to new $5 billion building’s circular shape. Cook, who predicted in October 2016 that Apple would help to kill cash, affirmed his interest at the shareholders’ meeting in seeing the elimination of money in his lifetime, even though using smart phones for mobile payments was not catching on as quickly as he first hoped.

However, Cook said he has noticed “very rapid adoption” of using mobile phone to pay at the cash register during the past 12 months, particularly in Russia, China and certain other countries where early adoption may not have been expected. Despite Apple adding the capability to its iPhones in 2014, acceptance has lagged as many point-of-sale terminals still have not been made compatible with the new technology.

Shareholders who gathered in the company’s Steve Jobs Theater also heard Cook tell them Apple’s wearables business is nearing the size of a Fortune 400 company. Earlier this month, Cook said the wearables business, which includes AirPods, Apple Watch and Beats, was the size of a Fortune 400 company, so it must be growing briskly.

In response to a shareholder’s question, Cook said he was “not really a fan” of using any of the estimated $285 billion in cash that the company might return to the United States due to the recently passed federal tax law to pay a special dividend. But Apples board of directors and management are “committed” to increasing their annual dividend payment to shareholders, he added.

Loup Ventures Managing Partner Gene Munster said earlier this week during an appearance on the Varney & Company show that about $70 billion could go towards share buybacks, with additional funds allocated to special dividend payouts and additional acquisitions.

Apple’s shares are up 17% higher for the past 12-month period and down about 9% year-to-date in 2018.

The company’s 175-acre corporate campus that hosted the shareholders’ meeting eventually is expected to be used by around 12,000 company employees.

Paul Dykewicz

Paul Dykewicz is the editor of StockInvestor.com and the editorial director of Eagle Financial Publications in Washington, D.C. He writes and edits for the website, as well as edits investment newsletters, time-sensitive trading alerts and other reports published by Eagle. He also is an accomplished, award-winning journalist who has written for Dow Jones, USA Today and other publications, as well as served as business editor of a daily newspaper in Baltimore. In addition, Paul is the author of the inspirational book, "Holy Smokes! Golden Guidance from Notre Dame's Championship Chaplain." He received his MBA in finance from Johns Hopkins University, where he was a two-time president of the school's Finance Club. In addition, Paul has a bachelor's degree from the University of Michigan and a master's degree in journalism from Michigan State University. Outside of work, Paul volunteers with a faith-based organization to assist the poor in Southeast Washington, D.C., to learn personal finance skills to lift themselves out of debt.