Apple’s Tim Cook to shareholders: Taking on the FBI is the right thing to do

Apple Inc. Chief Executive Tim Cook defended his hard-line stance against the FBI and a court order over consumer privacy as “the right things to do” during the company’s annual investors conference Friday.

“We are a staunch advocate for our customers’ privacy and personal safety,” Cook said, perched on a stool in front of about 200 shareholders. “We’ve been in the news lately, and some of you may have some questions on that. We do these because these are the right things to do. Being hard doesn’t scare us.”

The comments, which hinted at the company’s messy, public feud with the FBI over the last two weeks, drew applause from the crowd gathered at Apple headquarters here.

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Apple uses the event to elect corporate directors, consider shareholder proposals and take their questions.

Cook fielded queries about Apple’s efforts to boost sales in China and India, countries crucial to growth as iPhone sales slow in the U.S. and Europe. Of Apple’s almost $234 billion in sales during the last fiscal year, nearly $60 billion came from its Greater China region and about $1 billion from India, Cook said.

Cook expressed optimism about overcoming economic problems in China and infrastructure issues in India that have hamstrung other multinational corporations.

“If you block the noise out and just look at the numbers, China is a huge, huge opportunity,” Cook said. “If you’re in this for the long term, as we are, China is a super market.”

On India, he added that the lack of high-speed mobile data and other “infrastructural brittleness” adds complexity, but he said he’s “convinced” that Prime Minister Narendra Modi will get things fixed.

But concerns about the iPhone’s prospects -- as well as perceived lackluster sales of its nearly year-old Apple Watch -- largely have been overshadowed by the debate over security and privacy.

On Thursday, Apple filed key court papers in its battle against the FBI, which wants the company’s assistance to get past the passcode lock on a terrorist’s iPhone. The agency says that without Apple’s assistance, investigators’ ability to fully understand the planning behind the Dec. 2 attack in San Bernardino will be thwarted.

Pleas for Apple to help have come from government officials and families of some of the 14 people killed in the shooting. But Apple says that obeying the court order to help the FBI would open a door for hackers and embolden law enforcement authorities to pry into customers’ private data.

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Shareholders offered mixed reactions when asked whether Apple should comply with the FBI’s order.

“I do think they should unlock it,” one shareholder, who asked not be quoted by name, said on the way into Friday’s event. “For something as serious as this, there should be a way to do it.”

Ann Hobbs, 80, of Morro Bay, said she was “totally backing” Cook.

“Once they open that phone, it’s the beginning of the end of privacy,” said the first-time attendee of the event.

A departing Apple employee whose last day at work was Friday said he feared how far the government would go if it could compel private companies to create new products and services as the FBI wants Apple to do.

“America is unique as a country founded on individual rights, and you don’t give up those rights to protect those rights,” said Mason Weems, 50, of Santa Cruz, who also owns Apple shares.

The Rev. Jesse Jackson praised Cook for his leadership on the privacy issue during Friday’s session. “Unprecedented government overreach” can’t be tolerated even in the wake of tragedy, Jackson said.

At the meeting itself, investors were set to reelect all eight board members, who include former Vice President Al Gore, Walt Disney Co. head Bob Iger and former Avon cosmetics CEO Andrea Jung.

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Meanwhile, preliminary tallies showed voters rejecting four proposals from shareholders. Some called for limiting greenhouse gas emissions and increasing diversity in the executive ranks, initiatives that Apple said it was already carrying out.

Shares of Apple have tumbled about 22% since its shareholder meeting last March. They were up slightly, 13 cents to $96.89 midday Friday.

Chat with us on Twitter @traceylien, @peard33

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