apple inc

COMPANY PROFILE

Apple Inc.

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TABLE OF CONTENTS

Company Overview..............................................................................................3

Key Facts...............................................................................................................3

Business Description...........................................................................................4

History...................................................................................................................7

Key Employees...................................................................................................11

Key Employee Biographies................................................................................12

Major Products and Services............................................................................17

Revenue Analysis...............................................................................................18

SWOT Analysis...................................................................................................20

Top Competitors.................................................................................................26

Company View.....................................................................................................27

Locations and Subsidiaries...............................................................................30

Apple Inc. Page 2© MarketLine

Apple Inc.TABLE OF CONTENTS

COMPANY OVERVIEW

Apple Inc. (Apple or "the company") is engaged in design, development and marketing of personalcomputers, media devices, and portable digital music players. The company also sells a variety ofrelated software, services, peripherals, networking solutions, and third-party digital content andapplications. The company primarily operates in the US. It is headquartered in Cupertino, Californiaand employed 63,300 people by the end of September 1, 2011 of which 60,400 are employed fulltime.

The company recorded revenues of $108,249 million during the fiscal year ended September 2011(FY2011), an increase of 66% over FY2010.The operating profit of the company was $33,790 millionduring FY2011, an increase of 83.8% over FY2010. The net profit was $25,922 million in FY2011,an increase of 85% over FY2010.

KEY FACTS

Apple Inc.Head Office1 Infinite LoopCupertinoCalifornia 95014USA

1 408 996 1010Phone

Fax

http://www.apple.comWeb Address

108,249.0Revenue / turnover(USD Mn)

SeptemberFinancial Year End

63,300Employees

AAPLNASDAQ NationalMarket Ticker


Apple Inc.Company Overview

BUSINESS DESCRIPTION

Apple (“the company”) offers a portfolio of products comprising Macintosh (Mac) computing systems,iPods line of portable digital music and video players, iPhone handsets and iPad portable multimediaand computing devices. The company designs, manufactures and markets a range of personalcomputers, mobile communication and media devices, and portable digital music players. Applealso sells a variety of related software, services, peripherals, networking solutions, and third-partydigital content and applications. In addition, the company sells a variety of third-party Mac, iPhone,iPad and iPod compatible products, including application software, printers, storage devices, speakers,headphones, and various other accessories and peripherals. Apple sells its products worldwidethrough its retail stores, online stores, and direct sales force and third-party cellular network carriers,wholesalers, retailers, and value-added resellers.

The company’s operations span across nine product lines which include: iPhone and related productsand services, iPad and related products and services, portables, iPod, desktops, other music relatedproducts and services, software, service and other net sales, and peripherals and other hardware.

iPhone and related products and services includes iPhone sales, carrier agreements, services, andApple-branded and third-party iPhone accessories. iPhone combines a mobile phone, an iPod, andan internet communications device in a handheld product. iPhone is based on Apple’s Multi-Touchuser interface, and features desktop-class email, web browsing, searching, and maps and iscompatible with both Macs and Windows-based computers. iPhone allows customers to access theiTunes Store to download audio and video files, as well as a variety of other digital content andapplications. In addition, Apple also sells iPhone accessories and third-party iPhone compatibleaccessories through its online and retail stores and from third parties. iPhone handset unit salestotaled 72.3 million in FY2011. As of September 24, 2011, Apple distributed iPhone in 105 countriesthrough 228 carriers.

iPad and related products and services includes iPad sales, services and Apple-branded andthird-party iPad accessories. iPad is a multi-purpose mobile device for browsing the web, readingand sending email, viewing photos, watching videos, listening to music, playing games, readinge-books and more. iPad is also based on Multi-Touch technology and allows customers to accessthe iTunes Store to download audio and video files, as well as a variety of other digital content andapplications. Apple sells iPad accessories and third-party iPad compatible accessories through itsonline and retail stores and through third parties. The unit sales of iPad reached 32.4 million duringFY2011. Apple distributed iPad in 90 countries as of September 24, 2011.

Portables and desktop product lines encompass Apple’s Mac hardware product lines. Desktopsinclude iMac, Mac mini, Mac Pro and Xserve product lines.The iMac desktop computer incorporatesa display, processor, graphics card, storage, memory and other components inside a single enclosure.The Mac Pro desktop computer is targeted at business and professional customers and is designedto meet the performance, expansion, and networking needs of the users. The Mac mini is a desktopcomputer in a compact enclosure. Portables comprise of MacBook, MacBook Air and MacBook Pro


Apple Inc.Business Description

product lines. MacBook Pro is a portable computer designed for professionals and consumers.MacBook Air is an ultra-slim portable computer designed for professionals and consumers.

iPod line of portable digital music and media players includes iPod touch, iPod nano , iPod shuffleand iPod classic. All iPods work with iTunes. Apple also offers its own iPod accessories, third-partyiPod compatible accessories through the company’s online and retail stores or from third parties.The iPod touch, based on iOS, is a flash-memory-based iPod with a widescreen display and aMulti-Touch user interface. The iPod nano is a flashmemory-based iPod that features Multi-Touchinterface allowing customers to navigate their music collection by tapping or swiping the display.The iPod nano features a polished aluminum and glass enclosure with a built-in clip.The iPod shuffleis a flash-memorybased iPod that features a clickable control pad to control music playback andVoiceOver technology enabling customers to hear song titles, artists and playlist names. The iPodclassic is a hard-drive based portable digital music and video player.

Other music related products and services include sales from the iTunes Store, App Store, andiBookstore in addition to sales of iPod services and Apple-branded and third-party iPod accessories.iTunes is an application that supports the purchase, download, organization and playback of digitalaudio and video files and is available for both Mac and Windows-based computers. iTunes isintegrated with the iTunes Store , a service that allows customers to discover, purchase, rent, anddownload digital content and applications. The iTunes Store includes the App Store and iBookstore.The App Store allows customers to discover and download applications, and the iBookstore featureselectronic books from major and independent publishers and allows customers to preview and buybooks for their iOS devices. Customers can access the App Store through either a Mac orWindows-based computer or through an iOS device.The iBookstore is accessed through the iBooksapplication on an iOS device.

Software, service and other net sales includes sales from the Mac App Store in addition to sales ofother Apple-branded and third-party Mac software and Mac and internet services. Mac App Storeallows customers to discover, download and install applications for their Mac products. The MacApp Store offers applications in education, games, graphics and design, lifestyle, productivity, utilitiesand other categories. The company offers a range of software products for consumer, small andmedium businesses, education, enterprise and government customers, including the company’sproprietary iOS and Mac OS X operating system software; server software; professional applicationsoftware; and consumer, education, and business oriented application software. iOS is Apple’smobile operating system that serves as the foundation for iOS devices. Mac OS X, the operatingsystem for Macs, is built on an open-source UNIX-based foundation. The application softwareincludes: iLife, a consumer-oriented digital lifestyle application suite included with all Mac computers;iWork, an integrated productivity suite designed to help users create, present, and publish documents,presentations, and spreadsheets; and other application software.

Peripherals and other hardware includes sales of displays, wireless connectivity and networkingsolutions, and other hardware accessories. Apple manufactures the Apple LED Cinema Display andThunderbolt Display. The company also offers a variety of Apple-branded and third-partyMac-compatible and iOS-compatible peripheral products, including printers, storage devices, computermemory, digital video and still cameras, and various other computing products and supplies.



The company offers the products across five operating segments: Japan, Americas, Europe, AsiaPacific and retail. Each operating segment provides similar hardware and software products andsimilar services.

The Americas segment includes both North and South America. The Europe segment includesEuropean countries as well as the Middle East and Africa.The Asia-Pacific segment includes Australiaand Asia, but does not include Japan.The retail segment operates Apple retail stores in 11 countries,including the US. Apple operated 357 stores comprising of 245 retail stores in the US and 112international retail stores, by the end of FY2011.

In addition to the above, the company also offers iCloud, its new cloud service, which stores music,photos, applications, contacts, calendars, and documents and wirelessly pushes them to multipleiOS devices, Macs and Windows-based computers. Users can sign up for free access to iCloudusing a device running iOS 5 or a Mac running Mac OS X Lion. Furthermore, the company alsooffers Apple TV which allows customers to watch movies and television shows on their high definitiontelevision. Content from iTunes, Netflix, YouTube, and Flickr as well as music, photos, videos, andpodcasts from a Mac or Windows-based computer can be wirelessly streamed to a television throughApple TV. Apple offers product support and services through AppleCare. These include assistancethat is built into software products, printed and electronic product manuals, online support includingcomprehensive product information as well as technical assistance, and the AppleCare ProtectionPlan, a fee-based service that typically includes two to three years of phone support and hardwarerepairs and dedicated web-based support resources.



HISTORY

Apple (or "the company") was incorporated in 1977. It was co-founded by Steven Wozniak andSteven P. Jobs. They introduced the first Apple I computer in 1976. The Apple I was a failure butApple II launched in 1980 was successful. The company offered its IPO in the year 1980.

In early 1980, competition from the PC market and internal difficulties led to critical managementchanges. By 1983, Apple faced stiff competition with the entry of IBM into the PC market, and thefailure of its Apple III version computer. Apple introduced its first mouse driven PC, the Macintosh,in 1984.

By 1990, the market was flooded with cheap PC clones and Microsoft had launched Windows 3.0.In 1994, the company launched the PowerPC chip based PowerMac, which allowed Macs to competewith the speed of Intel's PC processors. Apple still had problems though and in 1995, the companyhad a $1 billion order backlog. These problems were compounded by the launch of Windows 95.The company's performance nosedived in 1995–96 when it lost $68 million.

In 1996, Apple acquired NeXT, and by virtue of which, its operating system (OS), Rhapsody, becameApple's next-generation OS. By 1997, Apple had incurred huge losses running in millions of dollars.Mr. Jobs, the co-founder returned as interim Chief Executive Officer. Under his leadership, Applereorganized to concentrate on its more profitable competencies, and divested its unsuccessfulbusinesses as spin-offs, including Newton, its personal digital assistant line of products.

Soon after Mr. Jobs returned, an agreement was made with Microsoft and was subsequently followedwith the appearance of MS Office on Mac PCs. In 2001, the company acquired PowerSchool, oneof the providers of web-based student information systems for K-12 schools and school districts,and Spruce Technologies, a privately held company involved in developing and marketing DVDauthoring products.

In the following year, Apple, Ericsson and Sun Microsystems formed an alliance to create a standardformat for delivering multimedia content to wireless devices, such as smartphones and PDAs. Thealliance combined Apple's QuickTime video creation software, Sun's content distribution softwareand hardware, and Ericsson's mobile infrastructure and services expertise.

Apple pursued a number of acquisitions during 2002. The company acquired Prismo Graphics,Silicon Grail, certain assets of Zayante, and also acquired the German based specialist musicsoftware manufacturer, Emagic. Additionally, in 2002, the company acquired certain assets of NothingReal, a privately held company engaged in the development of high performance tools designed forthe digital image creation market.

Apple launched its iTunes music store, an online store for downloading music tracks and albums,in 2003. In the following year, the company signed licensing agreements with three of the largestEuropean independent music labels, Beggars Group, Sanctuary Records Group and V2, adding


Apple Inc.History

tens of thousands of additional independent tracks from leading artists to the iTunes music store inthe UK, France and Germany. In the same year, Apple introduced its fourth generation iPod portabledigital music player.

In 2005, the company made an agreement to use Intel microprocessors in its Macintosh PCs. Laterin the year, the company collaborated with Acura, Audi, Honda and Volkswagen to deliver iPod withtheir car stereos for 2006 model lines, and also introduced mobile phone with iTunes in collaborationwith Motorola and Cingular Wireless.

Chrysler, in association with Apple, integrated iPod option in the audio systems in its 2006 models.In the same year, Apple sold its student information systems (SIS) division, PowerSchool, to Pearson.Later in the year, Ford, General Motors and Mazda teamed up with Apple to integrate iPod acrosstheir brand and models. In 2006, Apple teamed up with Air France, Continental, Delta, Emirates,KLM and United Airlines to integrate iPod with in-flight entertainment systems.

The company changed its name from Apple Computer, Inc to Apple Inc in 2007, representing itsexpanding product portfolio and increasing focus on consumer electronics market. Apple resolvedits 'iPhone' trademark issue with Cisco Systems by entering into an agreement in 2007. Accordingto the agreement, both the companies acknowledged the ownership rights and will use the trademarkin their products. In the same year, Apple launched its revolutionary product, iPhone, a smartphonedevice, and also launched iPod nano, featuring two inch display.

In 2008, Apple introduced Time Capsule, a backup appliance that automatically and wirelessly backsup everything on one or more Macs running Leopard. Subsequently, it also introduced Mac Pro witheight processor cores, and MacBook Air, a thin notebook, which measures a maximum height of0.76-inch.

Apple introduced Xsan 2, the first major upgrade to its easy-to-use, high performance, enterpriseclass SAN file system for Mac OS X, in 2008. Subsequently, the company introduced MobileMe, anew internet service that offers push email, push contacts and push calendars to native applicationson iPhone, iPod touch, Macs and PCs. Also in 2008, Apple announced iPod touch.

In 2009, Apple introduced iWork '09, a new version of Apple's office productivity suite, and iLife '09,which features major upgrades to iPhoto, iMovie and GarageBand, and included iDVD and anupdated version of iWeb. Subsequently, the company introduced the iPhone 3GS, Apple'sthird-generation smartphone with new features such as, longer battery life, high-quality 3 megapixelautofocus camera, easy to use video recording and hands free voice control.

Later in the year, Apple launched its iTunes Store in Mexico with a selection of Mexican andinternational music from all the major labels and independent labels. Subsequently, Apple launchedits previously announced iPod touch lineup with features including Apple Multi-Touch user interface,3.5-inch widescreen glass display, Wi-Fi, Bluetooth, and a built-in accelerometer and speaker.

During the last quarter of 2009, the company updated its MacBook with LED-backlit display, AppleMulti-Touch trackpad and built-in seven-hour battery, and subsequently, introduced its wireless


Apple Inc.History

Magic Mouse, the world's first mouse to use Apple's Multi-Touch technology. Subsequently, Appleresponded to a lawsuit brought against it by Nokia with a countersuit, claiming that Nokia infringed13 Apple patents.

In 2010, Apple announced iPad, a high-resolution, multi-touch display device for browsing the web,reading, sending email, and viewing entertainment content. In the same year, Apple filed a lawsuitagainst HTC for infringing of 20 Apple patents related to the iPhone's user interface, underlyingarchitecture and hardware. Subsequently, the company's iPad, was made available in the US,Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK, and sold 300,000units on the first day of its launch in the US. Furthermore in 2010, the company previewed its iPhoneOS 4 software and released a beta version of the software to iPhone Developer Program members.

The company launched iPad in nine more countries, including Australia, Canada, France, Germany,Italy, Japan, Spain, Switzerland and the UK in the same year. Apple introduced the new iPhone 4featuring FaceTime, which allows video calling, and Apple's new Retina display for super crisp text,images and video in 2010. In the same year, Apple released Safari 5.0.1 with extensions supportallowing developers to create extensions with HTML5, CSS3 and JavaScript web standards.Subsequently, the iPhone 4 was launched in 17 more countries. Also, Apple updated its all-in-oneiMac line, with the latest Intel Core i3, Core i5 and Core i7 processors and powerful new graphics.

Apple announced the new iPod touch in 2010, with new features including Retina display, FaceTimevideo calling, HD video recording, Apple's A4 chip, 3-axis gyro, iOS 4.1 and Game Center. In thesame year, Apple introduced iTunes 10 with Ping, a new music-oriented social network. Subsequently,the company announced the new Apple TV which allows viewers to watch HD movies and TV shows.In 2010, Apple introduced the Apple Store in China (apple.com.cn) to shop online for Apple products.In the same year, the company unveiled an all new MacBook Air. Furthermore, Verizon Wirelessand Apple announced the availability of iPad at over 2,000 Verizon Wireless Stores in the US.Subsequently, Oracle and Apple launched the OpenJDK project for Mac OS X. In 2010, Apple andthe Dentsu Group formed a partnership to expand Apple's iAd mobile advertising network to Japanin early 2011. As part of the agreement, Dentsu will be responsible for the selling and creativeexecution of iAds in Japan, and Apple will host, target and deliver the iAds to its iPhone and iPodtouch users.

In January 2011, Verizon Wireless launched the iPhone on its network, ending the exclusivity ofAT&T. In the same month, Apple launched the Mac App Store with more than 1,000 free and paidapplications.

Apple updated its MacBook Pro family with next generation processors and graphics, high-speedThunderbolt I/O technology and a new FaceTime HD camera in February 2011. In the same month,Apple introduced iPad 2, featuring a new design that is 33% thinner and up to 15% lighter than theoriginal iPad.

In March 2011, Apple introduced iOS 4.3, the latest version of its mobile operating system, withfaster Safari mobile browsing performance with the Nitro JavaScript engine; iTunes Home Sharing;


Apple Inc.History

enhancements to AirPlay; and the Personal Hotspot feature for sharing an iPhone 4 cellular dataconnection over Wi-Fi.

The company launched its second generation iPad in April 2011.

In May 2011, Apple launched its new iMac. In the same month, the company made iWork availablefor iPhone and iPod touch users.

In the following month, Apple launched iCloud, a set of free new cloud services that work withapplications on iPhone, iPad, iPod touch, Mac or PC to automatically and wirelessly store contentin iCloud and automatically and wirelessly push it to all devices.

In July 2011, the company unveiled the Apple Thunderbolt display, the world’s first display withThunderbolt I/O technology for Mac notebook.

The following month, Steve Jobs resigned as Chief Executive Officer at Apple.

In October 2011, the company launched its fourth generation iPhone and fifth generation iOS.

Apple launched iTunes Store in Brazil and in 15 other countries in Latin America in December 2011.

In January 2012, the company launched its new iPhone 4S in China and 21 additional countries. Tostrengthen its presence in the education market, Apple launched all-new iTunes U app, catering toeducators and students access to teaching and taking entire courses on their iPad, iPhone and iPodtouch. Furthermore in the same month, the company launched iBooks 2 for iPad, featuring iBookstextbooks, a new kind of textbook.

The company launched its third generation of iPad in March 2012.

In April 2012, the newly launched iPad was made available South Korea and 11 other countries.


Apple Inc.History

KEY EMPLOYEES

CompensationBoardJob TitleName

377996537 USDExecutive BoardChief Executive OfficerTimothy D. Cook

256796 USDNon Executive BoardChairmanArthur D. Levinson

255320 USDNon Executive BoardDirectorBill Campbell

263765 USDNon Executive BoardDirectorMillard Drexler

260729 USDNon Executive BoardDirectorAlbert Gore Jr

Non Executive BoardDirectorRobert A. Iger

502025 USDNon Executive BoardDirectorAndrea Jung

333499 USDNon Executive BoardDirectorRonald D. Sugar

1416143 USDSenior ManagementSenior Vice President, ChiefFinancial Officer

Peter Oppenheimer

Senior ManagementSenior Vice President, GeneralCounsel and Secretary

D. Bruce Sewell

1416527 USDSenior ManagementSenior Vice President, iOS SoftwareScott Forstall

Senior ManagementSenior Vice President, HardwareEngineering

Robert Mansfield

Senior ManagementSenior Vice President, WorldwideProduct Marketing

Philip W. Schiller

Senior ManagementSenior Vice President, OperationsJeffrey E. Williams

52952975 USDSenior ManagementSenior Vice President, InternetSoftware and Services

Eduardo H. Cue

Senior ManagementSenior Vice President, RetailJohn Browett


Apple Inc.Key Employees

KEY EMPLOYEE BIOGRAPHIES

Timothy D. Cook

Board: Executive BoardJob Title: Chief Executive OfficerSince: 2011Age: 51

Mr. Cook has been the Chief Executive Officer at Apple since 2011. Before being named as theChief Executive Officer he was the company’s Chief Operating Officer. Mr. Cook joined the companyin 1998 and also served as the Executive Vice President, Worldwide Sales and Operations from2002 to 2005. In 2004, his responsibilities were expanded to include the company's Macintoshhardware engineering. From 2000 to 2002, Mr. Cook served as the Senior Vice President, WorldwideOperations, Sales, Service and Support. From 1998 to 2000, he served as the Senior Vice President,Worldwide Operations. Prior to joining the company, Mr. Cook was the Vice President, CorporateMaterials at Compaq. Prior to his work at Compaq, he was the Chief Operating Officer of the ResellerDivision at Intelligent Electronics. He also spent 12 years at IBM, most recently as the Director ofNorth American Fulfillment. Mr. Cook also has served as a Director at NIKE since 2005.

Arthur D. Levinson

Board: Non Executive BoardJob Title: ChairmanAge: 61

Mt. Levinson is the Chairman at Apple. He has been the Chairman at Genentech since 1999.Previously, Mr. Levinson also served as Chief Executive Officer at Genentech from 1995 to 2009.Since 2009, he served as an Advisor at Genentech’s Research and Early Development center andas a Member at the Scientific Resource Board, Genentech’s external advisory group. Mr. Levinsonis a Director at NGM Biopharmaceuticals and also serves as a Director at Amyris, on the Board ofScientific Consultants at the Memorial Sloan-Kettering Cancer Center, on the Industrial AdvisoryBoard at the California Institute for Quantitative Biomedical Research, on the Advisory Council forthe Princeton University Department of Molecular Biology, on the Advisory Council for the Lewis-SiglerInstitute for Integrative Genomics, and on the Executive Council of TechNet.

Bill Campbell

Board: Non Executive BoardJob Title: DirectorSince: 1997Age: 71


Apple Inc.Key Employee Biographies

Mr. Campbell has been a Director at Apple since 1997. He has been the Chairman at Intuit since1998. Mr. Campbell previously served as the President and Chief Executive Officer at Intuit from1994 to 1998 and as Chief Executive Officer from 1999 until 2000. For the three years before joiningIntuit, he was the President and Chief Executive Officer at GO Corp. Mr. Campbell is also theChairman of the Board of Trustees at Columbia University and a Director of The National FootballFoundation & College Hall of Fame.

Millard Drexler


Mr. Drexler has been a Director at Apple since 1999. He has been the Chairman and Chief ExecutiveOfficer at J.Crew Group since 2003. Previously, Mr. Drexler was the Chief Executive Officer at theGap from 1995 and the President from 1987 to 2002. He was also a Director at Gap from 1983 to2002.

Albert Gore Jr


Mr. Gore has been a Director at Apple since 2003. He has served as the Chairman at Current TVsince 2002, Chairman at Generation Investment Management since 2004 and a Partner at KleinerPerkins Caufield & Byers since 2007. Mr. Gore is also the Chairman of the Alliance for ClimateProtection.

Robert A. Iger


Mr. Iger has been a Director at Apple since 2011. He is the Chairman and Chief Executive Officerof the Walt Disney. Prior to his current role, Mr. Iger served as President and Chief Executive Officerfrom 2005 and President and Chief Operating Officer during 2000–05. Mr. Iger joined the Disneysenior management team in 1996 as the Chairman of the Disney-owned ABC Group and in 1999was given the additional responsibility of President, Walt Disney International.



Andrea Jung


Ms. Jung has been a Director at Apple since 2008. She was the Chairman and Chief ExecutiveOfficer at Avon since 2001, having previously served as the Chief Executive Officer at Avon since1999 and as a Director since 1998. Since 1998, Ms. Jung has been a Director at General Electric,where she serves on the Management Development and Compensation Committee and theNominating and Corporate Governance Committee. She is also a Member at the New YorkPresbyterian Hospital Board of Trustees, a Director at Catalyst, a nonprofit corporate membershipresearch and advisory organization, and the Chairman at the World Federation of Direct SellingAssociations.

Ronald D. Sugar


Dr. Sugar has been a Director at Apple since 2010. He is the retired Chairman of the Board andChief Executive Officer at Northrop Grumman. Dr. Sugar was the Chairman and Chief ExecutiveOfficer at Northrop Grumman from 2003 until 2009 and the President and Chief Operating Officerfrom 2001 until 2003. He was the President and Chief Operating Officer at Litton Industries from2000 until the company was acquired by Northrop Grumman in 2001. Earlier, Mr. Sugar was theChief Financial Officer at TRW. He is also a Director at Amgen since 2010 and at Chevron since2005. Dr. Sugar is a Member of the National Academy of Engineering, the Trustee of the Universityof Southern California, a Director of the Los Angeles Philharmonic Association and the nationaltrustee of the Boys and Girls Clubs of America.

Peter Oppenheimer

Board: Senior ManagementJob Title: Senior Vice President, Chief Financial OfficerAge: 49

Mr. Oppenheimer has been the Senior Vice President, Chief Financial Officer at Apple. He joinedthe company in 1996. Mr. Oppenheimer also served as the Vice President and Corporate Controllerand as the Senior Director of Finance for the Americas region of the company. Prior to joining Apple,he was the Chief Financial Officer of one of the four business units at Automatic Data Processing



(ADP). Prior to joining ADP, Mr. Oppenheimer spent six years in the IT Consulting Practice at Coopersand Lybrand.

D. Bruce Sewell

Board: Senior ManagementJob Title: Senior Vice President, General Counsel and SecretaryAge: 53

Mr. Sewell has been the Senior Vice President, General Counsel and Secretary at Apple. He joinedthe company in 2009. Prior to Apple, he served as the Senior Vice President, General Counsel atIntel from 2005. Mr. Sewell also served as Intel's Vice President, General Counsel from 2004 to2005 and as the Vice President of Legal and Government Affairs, Deputy General Counsel from2001 to 2004. Prior to joining Intel in 1995, Mr. Sewell was a Partner in the law firm of Brown andBain PC.

Scott Forstall

Board: Senior ManagementJob Title: Senior Vice President, iOS SoftwareAge: 43

Mr. Forstall is the Senior Vice President, iOS Software at Apple. He joined the company in 1997upon the company's acquisition of NeXT. Mr. Forstall also has served as the Vice President ofPlatform Experience while leading several releases of Mac OS X, and as Director of ApplicationFrameworks. Prior to joining the company, Mr. Forstall worked at NeXT developing core technologies.

Robert Mansfield

Board: Senior ManagementJob Title: Senior Vice President, Hardware EngineeringSince: 2008Age: 51

Mr. Mansfield has been the Senior Vice President, Hardware Engineering at Apple since 2008. Hejoined the company in 1999 as the Vice President of Development Engineering. Prior to joiningApple, Mr. Mansfield was the Vice President of Engineering at Raycer Graphics and a Senior Directorat Silicon Graphics.

Philip W. Schiller

Board: Senior ManagementJob Title: Senior Vice President, Worldwide Product Marketing



Age: 51

Mr. Schiller has been the Senior Vice President, Worldwide Product Marketing at Apple. He rejoinedthe company in 1997. Prior to rejoining Apple, Mr. Schiller was the Vice President of Product Marketingat Macromedia from 1995 to 1997 and the Director of Product Marketing at FirePower Systems from1993 to 1995. Prior to that, Mr. Schiller spent six years at Apple in various marketing positions.

Jeffrey E. Williams

Board: Senior ManagementJob Title: Senior Vice President, OperationsSince: 2010Age: 48

Mr. Williams has been the Senior Vice President, Operations at Apple since 2010. He joined thecompany in 1998. Mr.Williams also served as the Head of Worldwide Procurement and Vice Presidentof Operations at Apple. Prior to joining the company, he worked in a number of operations andengineering roles at IBM from 1985 to 1998.

Eduardo H. Cue

Board: Senior ManagementJob Title: Senior Vice President, Internet Software and ServicesAge: 47

Mr. Cue is the Senior Vice President, Internet Software and Services at Apple. He joined the companyin 1989. Mr. Cue held various positions at Apple, including Vice President of Internet Services andSenior Director of iTunes Operations. He holds a degree in Computer Science and Economics fromDuke University.

John Browett

Board: Senior ManagementJob Title: Senior Vice President, RetailSince: 2012

Mr. Browett has been the Senior Vice President, Retail at Apple since 2012. Prior to this, he wasthe Chief Executive Officer at Dixons Retail since 2007. Prior to joining Dixons Retail, Mr. Browettheld several executive positions at Tesco including Chief Executive Officer at Tesco.com. Earlier,he advised retail and consumer goods clients at Boston Consulting Group.



MAJOR PRODUCTS AND SERVICES

Apple Inc. (Apple or "the company") is engaged in design, development and marketing of personal computers, media devices, and portable digital music players. The company's key products and services include the following:

SmartphonesTablet PCsDesktop PCsPortable PCsSoftwareOperating systemApplication softwareHardwarePeripheralsDigital contentTelevisionCloud softwareServer softwareProductivity suiteDigital music playersWi-Fi base stations

Brands:

iOSAppleMaciPhoneiPadiPodiMaciMini


Apple Inc.Major Products and Services

REVENUE ANALYSIS

Overview

The company recorded revenues of $108,249 million during the fiscal year ended September 2011(FY2011), an increase of 66% over FY2010. For the FY2011, the US, the company's largestgeographic market, accounted for 38.6% of the total revenues.

Apple generates revenues through eight product lines: iPhone and related products and services(43.5% of the total revenues during FY2011), iPad and related products and services (18.8%),portables (14.2%), iPod (6.9%), desktops (5.9%), other music related products and services (5.8%),software, service and other net sales (2.7%) and peripherals and other hardware (2.2%).

Revenues by product line

During the FY2011, the iPhone and related products and services product line recorded revenuesof $47,057 million, an increase of 86.9% over FY2010.

The iPad and related products and services product line recorded revenues of $20,358 million inFY2011, compared to $4,958 million in FY2010.

The portables product line recorded revenues of $15,344 million in FY2011, an increase of 36.1%over FY2010.

The iPod product line recorded revenues of $7,453 million in FY2011, a decrease of 9.9% comparedto FY2010.

The desktops product line recorded revenues of $6,439 million in FY2011, an increase of 3.8% overFY2010.

The other music related products and services product line recorded revenues of $6,314 million inFY2011, an increase of 27.6% over FY2010.

The software, service and other net sales product line recorded revenues of $2,954 million in FY2011,an increase of 14.8% over FY2010.

The peripherals and other hardware product line recorded revenues of $2,330 million in FY2011,an increase of 28.4% over FY2010.

Revenues by Geography


Apple Inc.Revenue Analysis

The US, Apple's largest geographical market, accounted for 38.6% of the total revenues in theFY2011. Revenues from the US reached $41,812 million in 2011, an increase of 46% over FY2010.

China accounted for 11.5% of the total revenues in the FY2011. Revenues from China reached$12,472 million in 2011, compared to $2,764 million in FY2010.

Other countries accounted for 49.9% of the total revenues in the FY2011. Revenues from othercountries reached $53,965 million in FY2011, an increase of 59.5% over FY2010.


Apple Inc.Revenue Analysis

SWOT ANALYSIS

Apple Inc. (Apple or "the company") is engaged in design, development and marketing of personalcomputers, media devices, and portable digital music players. Through the integration model, bothhorizontally and vertically, the company was able to build non replicable and sustainable competitiveadvantages. However, as the market growth shifts to emerging markets, Apple’s price positioningwill impact competitiveness.

WeaknessesStrengths

Dependence on iPhone and iPadA combination of horizontal and verticalintegration created formidable competitiveadvantage

Lack of products at different price pointslimits the addressable market

A string of successful productsIndustry leading growth rates

ThreatsOpportunities

As market shifts to emerging nations theprice competition intensifies

Emerging opportunities in enterprise marketEmerging nations provide strong growthopportunities Intense competitionApple TV

Strengths

A combination of horizontal and vertical integration created formidable competitive advantage

Apple has over the years followed integration both horizontally and vertically and as a result emergedas a formidable competitor. The company’s multiple devices provide horizontal integration. Applehas presence across main digital media devices of computing and mobile communications.ThroughPCs, tablets, smartphones and other devices Apple aimed at offering a whole range of associateproducts and devices. Apple through vertical integration connected the user experience across thedevices. The company offers hardware, software, content, services and also retails its productscreating vertical integration. Manufacturing hardware gives complete control over design aspectsand quality of products in the market. In addition to the hardware, the company also built strongsoftware and content business which is equipping Apple with several competitive advantages. Thecompany’s operating system that spans across multiple devices and includes content and application.Consequently, switching to a competitor becomes difficult due to the dependence on iOS. Anotherkey integration aspect that has enabled Apple to gain competitive advantage is the content offering.The company’s content base is large and is shared across all devices through iTunes. iTunes is a


Apple Inc.SWOT Analysis

storefront offering all kinds of media. In addition to the above, the company also engages in retailing.This helps Apple to have control over successfully positioning its products to the end user.

Apple has followed a vertical integration strategy to build a formidable competitive advantage. Thecompany’s business strategy leverages its unique ability to design and develop its own operatingsystems, hardware, application software, and services.The vertical integration provides control overthe entire user experience or process from hardware to software which facilitates higher customerloyalty and provide lock-in. Apple enjoys a favorable competitive environment provided by the userdependence on iOS which enables it to earn incremental earnings by offering all associated devices.In the era of convergence this is a huge competitive advantage. Apple’s sustainability of marketshare stems from the fact that it was able to successfully connect its devices with each other andone generation of devices with the next. Through these integration models, Apple built sustainablecompetitive advantages that are hard to replicate.

A string of successful products

Apple has a string of successful product launches which created a halo effect and the company wasable to drive its market share. According to industry estimates, sales of portable CD players werestill more than double those of mp3 players during the holiday season of 2004, when the iPod waslaunched. But between the third quarters of 2004 and 2005, sales of the iPod increased over sixfolds indicating the massive success of iPod. The customers kept purchasing new versions of thesame products and by 2008 it had captured 48% of the mp3 player market share. SanDisk’s Sansamp3 player was the iPod’s closest competitor with 8% market share. In 2011, the estimates indicatethat Apple iPod had over 75% market share and about 300 Million iPods were sold since its launch.

Following iPod was the iPhone which saw Apple’s success build in the smartphone market. Sinceits launch, iPhone captured increasing market share and displaced the then mobile phone marketleader, Nokia. By the end of third quarter of 2007, iPhones accounted for 3.4% after its launch inthe beginning of 2007. The product gained traction and the market share was three times higher bythe end of third quarter of 2008. The success resonated with each launch of iPhone. Apple sold onemillion of its new 3G iPhones in the first three days of its debut while it took the first iPhone 74 daysto sell a million. The success continued and with its most recent release, Apple again commandedrecord selling of its iPhone. The year 2011 was the year that Apple sold the most number of unitsand in first quarter of 2011, the company sold 14.1 million. In the last quarters of 2011 with the launchof iPhone 4S it showed all time high selling record at 20.3 million. Apple was also the top smartphonevendor in 2011, with a 19% market share. With intermittent bumps when Android and Samsunggained market share at a faster pace, the company’s iPhones emerged as the fastest growingsmartphones. The success of the product was also reflected in the fact that Apple captured about75% of the mobile phone industry’s total profits although it recorded an increase of 9% of total unitvolume in fourth quarter of 2011. This indicates that the company enjoys pricing power as despitepremium pricing it is able to enhance growth and profits. iOS based smartphones manufactured byApple also saw a steep rise in sales of nearly 96% in first quarter of FY2012 where in about 33million handsets were sold in the quarter, much higher than 16 million sold in first quarter of 2011.



Apple’s foray into tablets market also witnessed unprecedented success. Apple released the firstiPad in 2010 and sold 300,000 units on the first day and sold three million in 80 days. During 2010,Apple sold 14.8 million iPads worldwide, representing 75% of tablet PC sales at the end of 2010.By the release of the iPad 2 in March 2011, more than 15 million iPads had been sold which wasmore than all other tablet PCs combined since the iPad's release. In 2011, it took approximately70% of the tablet computing market share in the US.

The halo effect has helped the company boost its PC sales, which despite being one the oldestproducts at Apple, lost to competition. In the fourth quarter of 2011 as the PC shipments declined,Apple’s Mac has witnessed strong growth. By the end of that quarter the company’s Mac had 11%market share and Apple was the only company which increased its Mac sales by 18% while HP,Dell, Toshiba and Acer witnessed declines in the fourth quarter of 2011 compared to 2010. By theend of first quarter of 2012, Apple displaced Toshiba and Acer from the top three and emerged asthe third largest player in the PC market.

Apple’s strong product line up has been responsible for the company’s industry leading growth rates.The product success also commanded premium pricing which enabled the company to enjoy strongmargins as well. With each successful product launch the company enhanced its brand positioningwhich propelled the success of its other products. Apple’s unprecedented history of successfullaunches is difficult to replicate and the company’s competitors are yet to launch products with suchcompelling success.

Industry leading growth rates

The revenue growth rates achieved by the company are a play of both increased unit sales andpricing power. While the unit growth has been derived from the appeal of its products gained in themarket place, the offshoot of successful product lines has resulted in Apple gaining a dominantposition, which has helped it command high pricing power. The price that Apple charges for itsiPhone is higher than the average selling price of a PC. On the back of its product success, Applecharged the carriers high rates for its phones and the industry estimates indicate that the companycollects about 40% more for its phones from carriers compared with top-end phones by competitors.

The combination of these factors enabled Apple to attain industry leading growth rates. For instance,Apple’s revenues grew 66% in FY2011 and the company grew at a CAGR of 59% during FY2009–11.In comparison, Microsoft’s revenues increased by 11.9% in FY2011 it grew its revenues at a CAGRof 9% during FY2009–11. Similarly Google’s revenues increased by 30% in FY2011 and Googlegrew its revenues at a CAGR of 27% during 2009–11. Apple’s growth rates much higher than thepeers highlight the company’s inherent ability to drive growth.

Weaknesses

Dependence on iPhone and iPad



The company’s revenues and growth rates are largely dependent on iPhone and iPad product lines.The iPhone, iPad and related products and services together accounted for 62.3% of the totalrevenues in FY2011. These product lines have been the growth drivers for the company. Goingforward at the growth rates of iPad, its contribution to total revenues is likely to further increase.Dependence on few product lines increases the business risk, especially in an industry characterizedby fast paced technological changes.

Lack of products at different price points limits the addressable market

Apple’s positions its products in the premium category and offers them at a single price points.Comparatively, the company’s competitors like Samsung have products at varied price points. Asa result the competitors have access to a large market base and are better positioned to capturevaried customer interests. Furthermore, lack of products at lower price points is proving to be achallenge while addressing price sensitive customer base. Price is the only effective competitivedisadvantage that Apple’s competitors have been leveraging.The company furthermore has presenceonly in the smartphone segment, while its competitors have presence in both smartphones andfeature phones. Therefore, despite being a leading player in the smartphone segment, Applecommands only 5% of the mobile handset segment. These factors limit the company’s addressablemarket compared to competitors.

Opportunities

Emerging opportunities in enterprise market

Apple has significant opportunities to tap in the enterprise, government and education markets,which are largely untapped so far. As ‘bring your own device’ trend starts making inroads in thecorporate sector, Apple will be able to effectively sell into this space. The popularity of the iPhoneand iPad with consumers is spilling over into the business world, as mobile users increasingly usetheir personal devices for business purposes. In the recent times, companies are opening up theirmobility strategies to allow for more choice, which has benefitted Apple. The company effectivelytapped into this market. A recent survey indicated that iPad usage in business has doubled in 2011.In another survey, about 96% of businesses have at least one iPad in use. SAP now has about3,000 corporate-owned iPhones and over 11,000 iPads.

Several other such instances indicate Apple has been capturing the enterprise market from RIM,which is a leading player in the segment.The General Services Administration, the US government’smain procurement agency announced that it will issue iPhones alongside BlackBerrys, and the staffmay request iPhone devices. A few other reports suggest that the US National Oceanic andAtmospheric Administration and Halliburton is phasing out BlackBerry devices for iPhones.

Apple’s success in the market is also clear from the fact that enterprise mobile vendors have beenwitnessing a surge in the uptake of iPhone and iPad. Specifically in the tablets market, among thecompanies surveyed, in fourth quarter of 2011, iPad was 96% of all tablets, iPhone accounted for



53% of all mobile phones activated. In addition to RIM, Microsoft is also a large player in the enterprisesegment. While Apple seems to have been capturing RIM’s share, Microsoft is yet to releasecompelling products for the market. Apple’s foray into the market and the “bring your own device”trend are likely to catalyze the company’s growth in the segment which will enable it to successfullythwart competition from entrenched players like RIM and Microsoft. Industry estimates also indicatethat the sales of Mac and iPads to the enterprise will increase 50% in 2012.

The market estimates indicate robust growth in enterprise tablet adoption. The enterprise tabletsmarket is estimated to grow at a CAGR of about 50% during 2011–16. The industry estimates alsoindicate that the shipment of tablets to enterprises is estimated to grow from 13 million units in 2011to 97 million units in 2016. Furthermore, enterprise sales of media tablets will account for over 30%of total tablet sales sold in 2015. The enterprise smartphone market is also estimated to witnessstrong growth. According to the industry estimates, the enterprise smartphone shipments will surgefrom 20 million units per year in 2010 to 54 million per year in 2016.The estimates also indicate thatenterprise smartphone shipments are expected to reach 32.9 million in 2012 from 26.8 million in2011.This indicates that enterprises will emerge as key customer group for the company’s productsand addressing the customer group will enable it to drive growth.

Emerging nations provide strong growth opportunities

Apple although has gained significant traction in the emerging markets is yet to tap the full growthpotential offered by these markets. Unlike in developing markets the lack of carrier subsidies andprice sensitive customer base is a contrast to the developed markets.This to a certain extent impactedthe pace of expansion in these markets. However, the popularity of its products enabled the companyto gain traction and Apple is set to capture huge potential offered by these economies. Accordingto the most recent industry estimates, China is to surpass the US as the largest market in the worldfor smartphone sales. China, India and other similar emerging markets have smartphone penetrationof about 20-30% which when compared to 60% in developed countries like the US, indicates thepotential for smartphone manufacturers. Furthermore, in tablets space emerging market will growfrom a 36% share of worldwide tablet shipments in 2011 to 46% in 2017

The company’s iPhone penetration in emerging nations is limited to 22% of the carriers indicatinglarge untapped base for smartphones in emerging nations. The company can tap into these growthmarkets to enhance the revenues.

Apple TV

The launch of Apple TV is anticipated to capture a largely untapped potential of connected devices.Growing demand for convergent devices is likely to drive up the demand for Apple TV. The industryestimates indicate that in 2012 20% of all television shipments will be Smart TVs and this is estimatedto increase to about 40% in 2013. Apple TV is expected to be launched in 2012 and the initial surveysindicate a massive take up especially in the high end TV market. Apple has to its credit severalsuccessful products that changed industry dynamics. Apple TV is estimated to effectively tap intothe pay TV market and is expected to drive up the top line and bottom line for Apple. The company’s



revenue growth has been driven by new product launches and the Apple TV could trigger stronggrowths in the near term.

Threats

As market shifts to emerging nations the price competition intensifies

Price can be a competitive disadvantage against Apple that the competitors can effectively use togain market share. This will prove to be a challenge while addressing the emerging markets, whichbecome important as the advanced economies’ smartphone markets attain maturity. The emergingmarkets lack carrier subsidies and the customer base in these markets is highly price sensitive.While competing against lower priced Android products could be a disadvantage. The revenuesfrom emerging market for Apple products will come from higher mix of older models. This indicatesthat as the smartphone markets move towards emerging countries, the average prices will start tofall, impacting the margins. The company has been facing marginal declines in average price perproduct. According to the industry estimates, the average price of iPhone is down by 1.9% and thatof iPad’s is down by 7.5%. Apple has not been able to effectively gain market share in emergingmarkets where historically, lower priced phones like Nokia have been popular. In 2012, Samsungwith smartphones at varied price points emerged as the market leader in emerging nations. Apple’spremium pricing strategy will prove to be challenging and could have a negative impact on theaverage prices that the company is able to command.

Intense competition

Apple faces intense competition from well funded and experienced peers like Microsoft and Google.The company’s growth rates will be hampered by the rivals. Google’s Android platform emerged asthe largest mobile operating system and the Windows is also estimated to capture increased marketshares. In the operating system space Android is expected to be the market leading platform whileMicrosoft is estimated to grow its share steadily and will be next to Android by 2015. The industryestimates suggest that Microsoft’s operating system’s market share will increase from 5.5% in 2012to 11% in 2012 and further to 19.5% in 2015. The iOS is estimated to have a market share of about17% by 2015. Google’s acquisition of Motorola indicates replication of Apple’s integrated model todrive growth. Google is well placed to leverage the market leading position of Android to drive marketpenetration. Samsung also emerged as a leading smartphone player and Microsoft’s product potentialis yet untested.The company faces cut throat competitive pressures from these players which couldhave a negative impact on the market shares and growth rates at Apple.



TOP COMPETITORS

The following companies are the major competitors of Apple Inc.

Dell Inc.Fujitsu LimitedHewlett-Packard CompanyInternational Business Machines CorporationSamsung Electronics Co., Ltd.Sony CorporationToshiba CorporationResearch In Motion LimitedNokia CorporationMicrosoft CorporationAcer IncLG Electronics, Inc.Oracle CorporationGoogle Inc.


Apple Inc.Top Competitors

COMPANY VIEW

An excerpt from the Management’s Discussion and Analysis of Financial Condition and Results ofOperations section is given below. The statement has been taken from the company’s 10-K filingfor FY2011.

Executive Overview

The Company designs, manufactures, and markets mobile communication and media devices,personal computers, and portable digital music players, and sells a variety of related software,services, peripherals, networking solutions, and third-party digital content and applications. TheCompany’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumerand professional software applications, the iOS and Mac OS X operating systems, iCloud, and avariety of accessory, service and support offerings. The Company also sells and delivers digitalcontent and applications through the iTunes Store, App Store, iBookstore, and Mac App Store. TheCompany sells its products worldwide through its retail stores, online stores, and direct sales force,as well as through third-party cellular network carriers, wholesalers, retailers, and value-addedresellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatibleproducts, including application software, printers, storage devices, speakers, headphones, andvarious other accessories and peripherals through its online and retail stores. The Company sellsto consumers, small and mid-sized businesses, and education, enterprise and government customers.

The Company is committed to bringing the best user experience to its customers through its innovativehardware, software, peripherals, and services. The Company’s business strategy leverages itsunique ability to design and develop its own operating systems, hardware, application software, andservices to provide its customers new products and solutions with superior ease-of-use, seamlessintegration, and innovative design. As part of its strategy, the Company continues to expand itsplatform for the discovery and delivery of third-party digital content and applications through theiTunes Store. As part of the iTunes Store, the Company’s App Store and iBookstore allow customersto discover and download applications and books through either a Mac or Windows-based computeror through “iOS devices,” namely iPhone, iPad and iPod touch. In January 2011, the Companyopened the Mac App Store to allow customers to easily discover, download and install applicationsfor their Macs.The Company also supports a community for the development of third-party softwareand hardware products and digital content that complement the Company’s offerings.The Company’sstrategy also includes expanding its distribution network to effectively reach more customers andprovide them with a high-quality sales and post-sales support experience.

The Company participates in several highly competitive markets, including mobile communicationsand media devices with its iPhone, iPad and iPod product families; personal computers with its Maccomputers; and distribution of third-party digital content and applications through the iTunes Store,App Store, iBookstore, and Mac App Store. While the Company is widely recognized as a leadinginnovator in the markets where it competes, these markets are highly competitive and subject toaggressive pricing. To remain competitive, the Company believes that continual investment inresearch and development and marketing and advertising is critical to the development and sale of


Apple Inc.Company View

innovative products and technologies. The Company’s research and development spending isfocused on investing in new hardware and software products, and in further developing its existingproducts, including iPhone, iPad, Mac, and iPod hardware; iOS and Mac OS X operating systems;and a variety of application software and online services.

The Company uses a variety of direct and indirect distribution channels, such as its retail stores,online stores, and direct sales force, and thirdparty cellular network carriers, wholesalers, retailers,and value-added resellers. The Company believes that sales of its innovative and differentiatedproducts are enhanced by knowledgeable salespersons who can convey the value of the hardwareand software integration, and demonstrate the unique solutions that are available on its products.The Company further believes providing direct contact with its targeted customers is an effectiveway to demonstrate the advantages of its products over those of its competitors and providing ahigh-quality sales and after-sales support experience is critical to attracting new and retaining existingcustomers.To ensure a high-quality buying experience for its products in which service and educationare emphasized, the Company continues to expand and improve its distribution capabilities byexpanding the number of its own retail stores worldwide. Additionally, the Company has invested inprograms to enhance reseller sales by placing high quality Apple fixtures, merchandising materialsand other resources within selected third-party reseller locations. Through the Apple PremiumReseller Program, certain third-party resellers focus on the Apple platform by providing a high levelof integration and support services, and product expertise.

Japan Earthquake and Tsunami and Thailand Flooding

On March 11, 2011, the northeast coast of Japan experienced a severe earthquake followed by atsunami, with continuing aftershocks. These geological events have caused significant damage inthe region, including severe damage to nuclear power plants, and have impacted Japan’s powerand other infrastructure as well as its economy. Certain of the Company’s suppliers are located inJapan, and certain of its other suppliers integrate components or use materials manufactured inJapan in the production of its products. To the extent that component production has been affected,the Company has generally obtained alternative sources of supply or implemented other measures.The Company does not currently believe these events will have a material impact on its operationsin the first quarter of 2012 unless conditions worsen, including, but not limited to, power outagesand expansion of evacuation zones around the nuclear power plants.

Beyond the first quarter of 2012, uncertainty exists with respect to the availability of electrical power,the damage to nuclear power plants and the impact to other infrastructure. Thus, there is a risk thatthe Company could in the future experience delays or other constraints in obtaining key componentsand products and/or price increases related to such components and products that could materiallyadversely affect the Company’s financial condition and operating results.

In addition, in recent months several regions of Thailand have experienced severe flooding, causingdamage to infrastructure, housing and factories. A number of the Company’s suppliers are locatedin Thailand. As with Japan, to the extent that component production has been affected, the Companywill work to obtain alternative sources of supply or implement other measures. Based on theCompany’s current assessment of the situation, it does not believe this event will have a material



impact on its operations in the first quarter of 2012; however, because the situation in Thailand isstill evolving uncertainty remains regarding the ultimate impact of this event on the Company.



LOCATIONS AND SUBSIDIARIESHead Office

Apple Inc.1 Infinite LoopCupertinoCalifornia 95014USAP:1 408 996 1010http://www.apple.com

Other Locations and Subsidiaries

Apple — Hong KongApple — Sydney2401 Tower OneSydney South NSW 1235Times Square133-622Causeway BayAUSHKG

Apple Distribution InternationalApple India Private LimitedHollyhill Industrial Estate19 FloorHollyhillConcorde Tower CCorkUB City No 24IRLVittal Mallya Road

Bangalore 560-001IND

Apple CanadaApple — Singapore7495 Birchmount Road7 Ang Mo Kio Street 64MarkhamSingapore 569086Ontario L3R 5G2SGPCAN


Apple Inc.Locations and Subsidiaries

MARKETLINE | 119 FARRINGDON ROAD | LONDON, UNITED KINGDOM, EC1R 3DAT: +44 161 238 4040 | F: +44 870 134 4371 | E: [email protected] | W: www.marketline.com

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