Apple Inc. Profile
1 Infinite Loop
Cupertino, CA 95014 United States
Phone : 408-996-1010
Fax : 408-974-2113
http://www.apple.com
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HIDDEN TEXT TO MARK THE BEGINNING OF THE TOC
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May 24, 2012 • PAGE i
Table of Contents
Company Overview
2
Key Information
2
Key Financials
2
Company Description
3
Company History
5
Historical Events
7
Company Financials
7
Financial Summary
7
Annual Income Statement
9
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May 24, 2012 • PAGE ii
Company Overview
1 Infinite Loop
Cupertino, CA 95014 United States
Phone : 408-996-1010
Fax : 408-974-2113
http://www.apple.com
Apple has an "i" for revolutionary technology. Since its release, the company's iPhone has spurred a revolution in
cell phones and mobile computing. It also continues to innovate its core Mac desktop and laptop computers, all of
which feature its OS X operating system, including the iMac all-in-one desktop for the consumer and education
markets, the MacBook Air ultra-portable laptop, and the high-end Mac Pro and MacBook Pro for consumers and
professionals. Apple scored a runaway hit with its digital music players (iPod) and online music store (iTunes). Its
iPad tablet computer has become another game-changer in the consumer market. Apple gets nearly 40% of sales
from customers in the US.
Key Information
DUNS Number
Location Type
Subsidiary Status
Manufacturer
Company Type
Plant/Facility Size (sq. ft.)
Owns/Rents
Foreign Trade
Accountant
Total Employees
1-Year Employee Growth
Employees At This Location
Year of Founding or Change in Control
Primary Industry
Primary SIC Code
Primary NAICS Code
Tradestyle
Latitude/Longitude
060704780
Headquarters
No
Yes
Public
930,000.00
Owns
Imports / Exports
Ernst & Young LLP
63,300
28.14%
2,000
1976
1570:Wireless Telephone Handset Manufacturing
36630000:Radio and t.v. communications equipment
334220:Radio and Television Broadcasting and
APPLE
37.330584 / -122.028965
Key Financials
Fiscal Year-End
Sales ($ M)
1-Year Sales Growth
Net Income
1-Year Net Income Growth
Total Assets
Market Value
Prescreen Score
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September
$108,249.00M
65.96%
$25,922.00M
84.99%
$116,371.00M
$495,938.18M
Low Risk
May 24, 2012 • PAGE 2
Company Description
Apple's high-profile co-founder and former CEO Steve Jobs died on October 5, 2011. Earlier that year Jobs had
begun an indefinite leave of absence to deal with ongoing health problems before finally stepping down as CEO but
retaining the chairman title. Tim Cook, who handled the company's day-to-day operations as COO during Jobs'
leave, was named CEO. Jobs left Apple with a stable of innovative products and a revolutionary distribution system
for applications that continues to stimulate demand for those products.
Also in October 2011, Apple released its iCloud offering, a set of free cloud services used to automatically and
wirelessly store content and push it to multiple iOS (Apple's mobile operating system) devices, as well as Mac and
Windows-based computers. iCloud enables simplified convergence among the many Apple devices, encouraging
consumer loyalty to the brand. Among one of its benefits is that calendars, contacts, and e-mail are updated across
all devices without the need to separately synchronize the data.
After emerging from the global recession with increased sales and profits in fiscal 2010, Apple continued to shine
with overall sales that increased by two-thirds in 2011 and net income nearly double that of the prior period. Doubledigit growth continues to be the norm for most of Apple's product lines. Sales of the iPhone and related products
were up by 87% for the year, down slightly from 90% increases recorded in the prior two years. The main
driver behind the company's sales growth in 2011, however, was the iPad; its sales rose more than 300% in 2011 to
become Apple's third largest product line. Only the iPod saw sales decline for the year (by 10%), though it still
managed to bring in a sales per unit increase as the product mix shifted toward the higher-margin iPod touch.
It was in 2010 that Apple first saw sales of the iPhone overtake personal computers as its largest product line; in
2011 iPhones and related products accounted for 43% of revenues. Initially launched in 2007, the iPhone
combines features of a high-end handset with those of an iPod. Having already captured a significant share of the
US smartphone market (where it competes primarily with RIM and a growing array of phones based
on Google's Android operating system), the iPhone has received regular updates that include additional
features, faster network speed, and lower price tags. The iPhone 4 was introduced in mid-2010, featuring video
calling, high-definition video recording, a front-facing camera, and its new A4 processor. The following year, the
iPhone 4S was released, adding a voice-activated personal assistant (Siri), as well as improved camera and highdefinition video recording features.
One complaint about the iPhone was that it was only available for use with AT&T, which was named the exclusive
carrier for the phone in the US market when it was released. In 2011 the iPhone became available on the Verizon
Wireless network, substantially increasing its reach across the US. Apple also continued to expand international
distribution, adding new carriers and resellers. Its carrier partners (which are not exclusive) include China
Unicom, Deutsche Telekom, and O2. In 2011, Apple distributed the iPhone in 105 countries through some
225 carriers. The company is seeing increased competition in the smartphone market, with some consumers finding
merit in handsets that are not tied to a specific carrier, especially considering the proliferation of websites offering
applications for alternative smartphones.
Once the world's top PC maker, Apple was relegated to relative niche status in a market dominated
by Microsoft Windows-based PCs. The company continues to lead the market in terms of design innovation, though
in 2011 personal computers made up only about 20% of sales, a number that has continued to fall over the
years. Apple's computers run its proprietary UNIX-based operating system, and the company cites the integration
and interoperability of its hardware and software as the key advantage over Windows-based PCs. Sales of
its portable systems were up 36% in 2011 due to higher demand for its newly updated MacBook Air and MacBook
Pro systems.
The uniqueness of Apple's computers is a double-edged sword for the company. The graphical interface and form
factor of Apple's computers reflect the aesthetic of Jobs, who had long championed the importance of visually
attractive, user-friendly design. The features that distinguish Macs allowed the company to maintain a loyal
following willing to pay premium prices and overlook any interoperability issues with Windows (a factor that Apple
largely addressed with its OS X operating system). However, despite market share gains made in recent years,
Apple still trails top Windows-based PC vendors, such as Hewlett-Packard and Dell. Building on the success of its
App Stores for the iPhone, iPad, and iPod touch, the company launched the Mac App Store, which features both
Apple and third-party software applications, in early 2011. More than a million apps were downloaded from the Mac
App Store in its first day. Another transformative product, the iPad fills a market niche between notebook computers, e-book readers, and
smartphones. With its slightly larger touchscreen display, the tablet has a number of functions, such as playing
games, music, movies, and videos; accessing the Web; keeping up with e-mail; and serving as an e-reader for books
and periodicals. The company also unveiled iBookstore, used to buy and store e-books. In its first year, 2010, the
iPad brought in around $5 billion in sales; the following year, the iPad and related products and services accounted
for more than $20 billion in sales.
In 2012 the US Department of Justice filed an antitrust lawsuit against Apple and five
publishers. HarperCollins, Hachette, and Simon & Schuster opted to settle rather than bear the cost of a drawn-out
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May 24, 2012 • PAGE 3
legal battle. Apple and two other publishers -- Macmillan and Penguin -- refused to settle and are preparing to take
on the government in court. At issue is a change to the pricing model for e-books, implemented about the time that
Apple released the iPad. Under the agreement with Apple, publishers set the price under the agency pricing model,
gave Apple a 30% commission, and agreed to give Apple the lowest price provided to any other retailer, the socalled "most-favored nation" clause. E-books had generally been sold under the wholesale pricing model, which
allows the book seller to set the price.
Only the late Jobs may have expected the level of success enjoyed by the company's music-related products. In
2011, sales of the iPod and other music-related products and services accounted for 13% of sales, a decrease of 7%
over the prior year. The iTunes Store, App Store, iBookstore, and an expanding amount of third-party audio and
video content available for sale and rent through iTunes, contributed growth of 33% in 2011 over the prior year.
Some of the continued popularity of Apple's products can be attributed to interest in digital downloads available for
its product lines. It didn't hurt that the Beatles catalog became available on iTunes late in 2010.
Since its debut, Apple has provided regular feature updates to the iPod, including touchscreen displays and wireless
capabilities. It also launched an online music service called iTunes Music Store that lets computer users purchase
and download songs for 99 cents each. Apple later expanded the online offerings to include music videos, audio
books, movies, television shows, and other content, as well as international versions of its music store. In 2008
Apple became the top music retailer by volume in the US market, surpassing Wal-Mart. The following year it rolled
out a demand-based price model (69 cents, 99 cents, $1.29) for music downloads; it also removed the digital rights
management (DRM) protection that essentially restricted the use of iTunes downloads on non-Apple devices.
Apple opened another online market in 2008, the App Store, to provide free and paid applications created by thirdparty software developers for the iPhone and the iPod touch. Taking a 30% cut from sales of third-party apps,
Apple created another revenue stream through the App Store, which the company tightly controls. In another
effort to boost brand awareness and its appeal among consumers, the company operates some 245 Apple retail
stores in the US and 112 stores in other countries. Apple generates around 13% of its sales through its retail
channel.
Apple's FileMaker subsidiary provides database software. Apple also offers application software that includes iWork
(productivity suite), Garage Band (consumer music creation), Final Cut (video film and editing), and Logic Studio
(high-end audio recording and production), among others.
Always a secretive company about its product designs, Apple has brought some chip design expertise in-house to
reduce its dependence on outside semiconductor suppliers. Its 2010 purchase of Intrinsity, a provider of chip design
software, was intended to support this strategy. The company still relies on silicon foundries (contract
semiconductor manufacturers) for the physical fabrication of its chips, but the moves mean fewer outsiders will be
involved in future designs of the iPad, the iPhone, and other mobile devices. Apple outsources production
of hardware products to a few partners, primarily Hon Hai Precision Industry and Quanta Computer.
In 2011 Apple was part of a consortium that paid $4.5 billion for some 6,000 patents and patent applications
from Nortel Networks covering data networking, Internet, optical, semiconductor, voice, wireless, and wireless 4G
technologies; additional members of the consortium included EMC, Microsoft, and Sony, among others. With the
proliferation of mobile devices comes the need for companies to have access to, if not outright ownership of, a
cache of intellectual property related to next-generation wireless technology. The Apple-Microsoft consortium beat
out an alliance between Intel and Google, whose $900 million started the bidding war.
Apple shares a long and thorny history with Microsoft. Although it provides an alternative to Microsoft's
omnipresent operating system, Apple's relative size and market share restrict its threat to the software giant's
stranglehold. The companies long maintained a working relationship; the Mac-compatible version of Microsoft's
popular Office suite is a key software title for Apple, and Apple scored crossover hits with Windows-friendly
editions of iPod and iTunes. Soon after Apple released its Safari Web browser, however, Microsoft announced it
would cease development of the Apple version of its Internet Explorer. In 2006 Apple released software that allows
its computers to run Microsoft's XP operating system. Microsoft, meanwhile, tried unsuccessfully to emulate
Apple's success with digital music players by marketing the Zune portable media player product.
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May 24, 2012 • PAGE 4
Company History
College dropouts Steve Jobs (1955-2011) and Steve Wozniak founded Apple in 1976 in California's Santa Clara
Valley. After Jobs' first sales call brought an order for 50 units, the duo built the Apple I in his garage and sold it
without a monitor, keyboard, or casing. Demand convinced Jobs there was a distinct market for small computers,
and the company's name (a reference to Jobs' stint on an Oregon farm) and the computer's user-friendly look and
feel set it apart from others.
By 1977 Wozniak added a keyboard, color monitor, and eight peripheral device slots (which gave the machine
considerable versatility and inspired numerous third-party add-on devices and software). Sales jumped from $7.8
million in 1978 to $117 million in 1980, the year Apple went public. In 1983 Wozniak left the firm and Jobs
hired PepsiCo's John Sculley as president. Apple rebounded from failed product introductions that year by unveiling
the Macintosh in 1984. After tumultuous struggles with Sculley, Jobs left in 1985 and founded NeXT, a designer of
applications for developing software. That year Sculley ignored Microsoft founder Bill Gates' appeal for Apple to
license its products and make the Microsoft platform an industry standard.
Apple blazed the desktop publishing trail in 1986 with its Mac Plus and LaserWriter printers. The following year it
formed the software firm that later became Claris (and ultimately FileMaker). The late 1980s brought new
competition from Microsoft, whose Windows operating system (OS) featured a graphical interface akin to Apple's.
Apple sued but lost its claim to copyright protection in 1992.
In 1993 Apple unveiled the Newton handheld computer, but sales were slow. Earnings fell drastically, so the
company trimmed its workforce. (Sculley was among the departed.) In 1994 Apple cried "uncle" and began licensing
clones of its OS, hoping a flurry of cheaper Mac-alikes would encourage software developers. By 1996 struggling
Apple realized Mac clones were stealing sales. That year it hired Gilbert Amelio, formerly of National Semiconductor,
as CEO.
The company bought NeXT in 1997, but sales kept dropping and it subsequently cut about 30% of its workforce,
canceled projects, and trimmed research costs. Meanwhile Apple's board ousted Amelio and Jobs took the position
back on an interim basis. The CEO forged a surprising alliance with Microsoft, which included releasing a Mac
version of Microsoft's popular office software. To protect market share, Jobs also stripped the cloning license from
chief imitator Power Computing and put it out of business.
In 1998 Apple jumped back into the race with its colorful cocktail of iMacs, and its first server software, the Mac OS
X. That year the company also revamped its profitable Claris unit (by cutting 300 employees, shifting most
operations to Apple, and renaming it FileMaker) and stopped making its Newton handheld device and printer
products.
Apple in 1999 opened a new chapter in portable computing with the introduction of its iBook laptop and (taking a
cue from Dell) began selling built-to-order systems online. In 2000, after two and a half years as the semipermanent
executive in charge, Jobs took the "interim" out of his title, and revamped the company's Web site around a suite of
consumer Internet services. Jobs unveiled overhauled desktop lines later that year, including an eight-inch cubeshaped G4. The company ended 2000 on a sour note, as an industrywide slowdown and poor response to the G4
cube resulted in Apple's first unprofitable quarter in years.
Apple opened 2001 with another round of product upgrades, including faster processors, components such as CD
and DVD burners, and an ultraslim version of its PowerBook, called Titanium. The company also made a move to
reclaim some of its slipping share in the education market, purchasing software maker PowerSchool. Soon Apple
confirmed a long-rumored plan to open a chain of retail stores in the US. The company then acquired DVD authoring
software maker Spruce Technologies. In line with its strategy to market Macs as "digital hubs" for devices such as
cameras and other peripherals, Apple closed the year with the introduction of a digital music player called the iPod.
In 2002 Apple introduced a new look for its iMac line; featuring a half-dome base and a flat-panel display supported
by a pivoting arm, the redesign was the first departure from the original (and, at the time, radical) all-in-one design
since iMac's debut in 1998. Looking to reclaim market share in the education sector, Apple then introduced the
eMac -- a computer similar to the iMac to be sold only to students and educators (Apple later introduced a retail
version). It continued its product push that year with the announcement that it would begin offering a rack-mount
server called Xserve. In 2004, Apple debuted a streamlined iMac design powered by its G5 processor.
Apple announced it would begin incorporating Intel processors into its PC lines in 2005, ending more than a decade
of using PowerPC microprocessors; the transition was completed the following year. Also that year, Apple, Motorola,
and Cingular Wireless (now AT&T Mobility) announced the debut of a mobile phone with iTunes functionality. Apple
also unveiled the iPod nano, an updated (and even smaller) version of its miniature iPod model, as well as an iPod
capable of playing video. In 2006 Apple reached a settlement in a dispute with Creative Technology over technology
used in digital music players; Apple agreed to pay the company $100 million in exchange for a license to use
Creative's patent related to navigation and organization. The company also launched an online movie service in 2006, and previewed a device called iTV for watching
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May 24, 2012 • PAGE 5
Apple unveiled a mobile phone offering called the iPhone in 2007. To reflect the growing breadth of its product
portfolio, the company announced it would change its name from Apple Computer to simply Apple. The company
kicked off 2008 with the release of an updated Apple TV device in conjunction with an iTunes movie rental service.
Looking toward the continued development of its mobile devices, Apple purchased P.A. Semi, a developer of lowpower processors, in 2008. In another move intended to bring more of its chip design in-house, Apple
bought Intrinsity, a provider of chip design software, in 2010.
After beginning 2011 with a leave of absence and then stepping down as CEO, Steve Jobs died on October 5, 2011.
COO Tim Cook had been named CEO after Jobs' resignation, though Jobs retained the chairman title until his death.
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Historical Events
Date
Event
Details
2011-08-24
2011-08-24
2011-01-17
2009-01-15
2007-01-09
Top Executive Change
Top Executive Change
Top Executive Change
Top Executive Change
Name Change
The company named Timothy D. Cook CEO.
Steven P. Jobs resigned as CEO, but was named chairman.
Steven P. Jobs began a leave of absence.
The company designated Timothy D. Cook CEO.
The company changed its name from Apple Computer, Inc. to Apple Inc.
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May 24, 2012 • PAGE 7
Company Financials
Financial Summary
Company Type
Fiscal Year-End
2011 Sales
1-Year Sales Growth
2011 Net Income
1-Year Net Income Growth
Prescreen Score
Auditor
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Public
NASDAQ: AAPL
Headquarters
September
$108,249.00M
65.96%
$25,922.00M
84.99%
Low Risk
Ernst & Young LLP
May 24, 2012 • PAGE 8
Annual Income Statement
All amounts in millions of US Dollars except per share amounts.
Revenue
Cost of Goods Sold
Gross Profit
Gross Profit Margin
SG&A Expense
Depreciation and Amortization
Operating Income
Operating Margin
Nonoperating Income
Nonoperating Expenses
Income Before Taxes
Income Taxes
Net Income After Taxes
Continuing Operations
Discontinued Operations
Total Operations
Total Net Income
Net Profit Margin
Diluted EPS from Continuing Operations
Diluted EPS from Total Operations
Diluted EPS from Total Net Income
Dividends per Share
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Sep 2011
108,249.00
64,431.00
43,818.00
40.48%
7,599.00
1,814.00
33,790.00
31.22%
(104.00)
519.00
34,205.00
8,283.00
25,922.00
Sep 2010
65,225.00
39,541.00
25,684.00
39.38%
5,517.00
1,027.00
18,385.00
28.19%
(156.00)
311.00
18,540.00
4,527.00
14,013.00
Sep 2009
42,905.00
25,683.00
17,222.00
40.14%
4,149.00
734.00
11,740.00
27.36%
(81.00)
407.00
12,066.00
3,831.00
8,235.00
Sep 2008
32,479.00
21,334.00
11,145.00
34.31%
3,761.00
473.00
6,275.00
19.32%
620.00
-6,895.00
2,061.00
4,834.00
Sep 2007
24,006.00
15,852.00
8,154.00
33.97%
2,963.00
317.00
4,409.00
18.37%
(48.00)
25,922.00
-25,922.00
25,922.00
23.95%
14,013.00
-14,013.00
14,013.00
21.48%
8,235.00
-8,235.00
8,235.00
19.19%
4,834.00
-4,834.00
4,834.00
14.88%
3,496.00
-3,496.00
3,496.00
14.56%
27.68
27.68
27.68
0.00
15.15
15.15
15.15
0.00
9.08
9.08
9.08
0.00
5.36
5.36
5.36
0.00
3.93
3.93
3.93
0.00
5,008.00
1,512.00
3,496.00
May 24, 2012 • PAGE 9
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