Attach candy thermometer to medium heavy saucepot over medium heat. Add butter to pot. Using wooden spoon or heat-proof spatula, stir until butter is melted. Add brown sugar and sweetened condensed milk to pot. Cook, stirring occasionally, until mixture comes to full boil. Using pastry brush dipped in cold water, brush off any sugar mixture stuck to sides of pan. Stir in cream of coconut. Return mixture to boil. Continue cooking, stirring occasionally, and cleaning sides of pan with wet pastry brush, until caramel reaches 245°F on candy thermometer.
Remove pot from heat. Carefully remove candy thermometer from pot; set aside. Carefully pour caramel mixture into heat-proof bowl. Return candy thermometer to bowl with caramel; let sit until caramel cools and registers 220°F on candy thermometer.
Meanwhile, stick apples through stem hole with Popsicle sticks or chop sticks. Dip apple into caramel mixture, swirling to coat completely, allowing excess caramel to drip back into bowl. Transfer apple to baking tray lined with buttered parchment or wax paper. (Note: Some caramel with pool at bottom of apple). Repeat with remaining caramel and apples.
Transfer shredded coconut to dish, if desired. Press shredded coconut onto caramel apples until coated, if desired.
Transfer caramel apples to refrigerator until chilled. Place apples in cellophane bags and tie with ribbon, if desired. Store in refrigerator, covered, for up to 4 days.