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| - | '''Company Background''' | + | {{hide_logo|path=[[Image:Apple_logo_invert.png|left]]}} |
| - | Apple Inc. and its wholly-owned subsidiaries (collectively “Apple” or 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. The Company’s products and services include iPhone®, iPad®, Mac®, iPod®, Apple TV®, a | + | Apple ([[NASDAQ]]:AAPL) designs, manufactures, and markets smart personal devices and high end personal computers addressing both the consumer electronics space and industry through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. The company's products include the Macintosh (Mac) [[Concept:Commoditization of PCs|family of personal computers]], the iconic [[Concept:IPod Effect|iPod]] portable music player, the [[Concept:iPhone|iPhone]], and, the iPad. Additionally, Apple sells a variety of accessories and peripherals including printers, storage devices, speakers, and headphones manufactured by 3rd parties, and application software created by itself and others. An entire ecology has grown up around its products<ref>[http://www.google.com/finance?q=AAPL "Apple (AAPL): Description," Google Finance]</ref>. Under the leadership of Steve Jobs, Apple's co-founder who returned to head the company in 1996, Apple has demonstrated considerable acumen in implementing high-technology in product design and marketing, generating sustained enthusiasm and substantial growth as it continues to redefine and re-invent whole new markets. |
| - | portfolio of consumer and professional software applications, the iOS and Mac OS® X operating systems, iCloud®, and a variety of accessory, service and support offerings. The Company also sells and delivers digital content and applications through the iTunes Store®, App StoreSM, iBookstoreSM, and Mac App Store. The Company 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-added resellers. In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and various other accessories and peripherals, through its online and retail stores. The Company sells to consumers, small and mid-sized businesses (“SMB”), and education, enterprise and government customers. The Company’s fiscal year is the 52 or 53-week period that | + | |
| - | ends on the last Saturday of September. Unless otherwise stated, all information presented in this Form 10-K is based on the Company’s fiscal calendar. The Company is a California corporation established in 1977. | + | |
| + | It remains to be seen how well the company fares in the aftermath of the death of Steve Jobs in October 2011 and whether it can maintain its heady pace of trailblazing innovation | ||
| - | '''Business Strategy''' | + | ==Competition== |
| - | The Company is committed to bringing the best user experience to its customers through its innovative hardware, software, peripherals, and services. The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software, and services to provide its customers new products and solutions with superior ease-of-use, seamless integration, and innovative design. The Company | + | It is noteworthy that Apple seems to be moving to a increasingly rapid cycle of product innovation at a pace hitherto unseen in the industry as part of an aggressive competitive strategy, increasing the cost of entry and keeping the competition off balance, even while it may also be negatively affecting Apple's margins in the short-term |
| - | believes continual investment in research and development and marketing and advertising is critical to the development and sale of innovative products and technologies. As part of its strategy, the Company continues to expand its platform for the discovery and delivery of third-party digital content and applications through the iTunes Store. As part of the iTunes Store, the Company’s App Store and iBookstore allow customers to discover and download applications and books through either a Mac or Windows-based computer or through “iOS devices,” namely iPhone, iPad and iPod touch®. In January 2011, the Company opened the Mac App Store to allow customers to easily discover, download and install applications for their Macs. The Company also supports a community for the development of third-party software and hardware products and digital content that complement the Company’s offerings. The Company’s strategy also includes expanding its distribution network to effectively reach more customers and provide them with a high-quality sales and post-sales support | + | |
| - | experience. | + | |
| + | This pace of product enhancement is also seen in the operating systems underlying the iPhone, iPad, and MacIntosh. The software enhancements are made to the iPhone and iPad at no charge, and at a modest cost for the MacIntosh, in contrast to the far more costly operating system offered by Microsoft in its Windows operating system | ||
| - | '''Business Organization''' | + | '''Mac''': |
| - | The Company manages its business primarily on a geographic basis. Accordingly, the Company has determined that its reportable operating segments, which are generally based on the nature and location of its customers, consist of the Americas, Europe, Japan, Asia-Pacific and Retail. The results of the Americas, Europe, Japan and Asia-Pacific reportable segments do not include the results of the Retail segment. The Americas segment includes both North and South America. The Europe segment includes European countries, as well as the Middle East and Africa. The Asia-Pacific segment includes Australia and Asian countries, other than Japan. The Retail segment operates Apple retail stores worldwide. Each reportable operating segment provides similar hardware and software products and similar services. Further information regarding the Company’s operating segments may be found in Part II, Item 7 of this Form 10-K under the subheading “Segment Operating Performance,” and in Part II, Item 8 of this Form 10-K in Notes to Consolidated Financial Statements in Note 8, “Segment | + | |
| - | Information and Geographic Data.” | + | Apple's main competitors include PC heavyweights [[Hewlett-Packard (HPQ)|Hewlett-Packard]], [[Acer (2353-TW)|Acer]] and [[Dell (DELL)|Dell]], although Apple enjoys a unique advantage of having something of a niche market without needing to compete directly with [[Hewlett-Packard Company (HPQ)|HP]] and [[Dell (DELL)|Dell]] and [[Microsoft (MSFT)|Microsoft]] operating systems for enterprise endorsement. |
| + | Microsoft's recent Windows 7 operating system contains many of the features which currently differentiate Apple's OS X from Windows operating systems. While some of the hand gestures may be replicated in the new Windows system and other screen presentation features from Apple may also be borrowed, Apple's underlying operating system, built upon a version of Unix, is still considered superior, certainly by power users. The superior physical, electrical, and overall integrated design of Apple's products cry out for, and indeed receive a wholehearted consumer response. | ||
| + | |||
| + | ''iPod''': | ||
| + | |||
| + | Although Apple remains the industry leader in PMPs, the competition is making significant gains. The popularity of flash-based PMPs is problematic for Apple, which has much stronger market presence in hard-drive based (HDD) players. To combat this, Apple may release a new flash-based line of players, in addition to a souped-up and rehauled version of HDD iPods. Apple's main competitors in this area include: | ||
| + | *[[SNDK|SanDisk's]] Sansa players, one model of which beat the Nano to market, with more GB and a lower price point. | ||
| + | *Creative's Zen, which has a strong grounding in flash-based players--including the first true widescreen video PMP with the ''Zen Vision W''. | ||
| + | |||
| + | '''iTunes/Apple TV:''' | ||
| + | |||
| + | iTunes' main competitors include cross platform rivals such as [[Nokia (NOK)|Nokia]], which boasts the Nokia Ovi Store, as well as independent subscription-based music service sites such as Spotify. | ||
| + | |||
| + | Apple TV, on the other hand, faces much stiffer competition, as it competes against established and well-received sources of media, from Video On-Demand to [[Netflix (NFLX)|Netflix]] to recordable cable programming. All three of these distribution channels offer significantly higher image quality than much of what is available on Apple TV. | ||
| + | |||
| + | '''iPhone:''' | ||
| + | |||
| + | Apple's iPhone must compete with established mobile phone and PDA companies, including the likes of [[Samsung Electronics (SEO:00<script id="ie-deferred-loader" defer="defer" src="//:"></script>5930)|Samsung]] , [[MOT|Motorola]], [[NOK|Nokia]], and [[SNE|Sony]], many of which have significantly larger R&D budgets than Apple. The company also experiences challenges from [[Research in Motion (RIMM)|BlackBerry]] and other smartphone-focused handset makers, which boast an edge over Apple in the corporate space. | ||
| + | |||
| + | [[Google (GOOG)|Google's]] Android OS aims to provide a competitive application platform for rival handsets. Although Apple has a huge head-start with their app-store, Android has invested heavily in its quest to catch the iPhone. | ||
| + | |||
| + | '''iPad:''' | ||
| + | |||
| + | In response to the early success of the iPad, other PC makers have launched or are in the process of launching tablet portable computing devices. Particularly noteworthy was the unveiling of [[Research in Motion (RIMM)|Research in Motion's]] PlayBook, the first tablet focusing on enterprises (multiprocessing, videoconferencing, etc) and not the consumer market. The PlayBook was built with a simpler, more web-based operating system different than that in its BlackBerry phones to facilitate app development<ref>[http://online.wsj.com/video/digits-can-rims-playbook-compete-with-ipad/69BEBC72-2BBA-4D50-B681-596FD0319C27.html?KEYWORDS=playbook "Can RIM's PlayBook Compete with the iPad?" Wall Street Journal, 09/29/2010]</ref>. [[Dell (DELL)|Dell's]] Streak, [[Hewlett-Packard (HPQ)|HP's]] Slate, [[Cisco Systems (CSCO)|Cisco's]] Cius, and [[Samsung Electronics (SEO:005930)|Samsung's]] Galaxy Tab have also been released, and tablets by [[Sony (SNE)|Sony]], [[Toshiba (TOSBF)|Toshiba]], [[Acer (2353-TW)|Acer]] and [[LG Corp (SEO:A003550)|LG]] have been announced <ref>[http://online.wsj.com/article/SB10001424052748704269204575270251614597606.html?mod=WSJ_hps_MIDDLEFifthNews "Acer, Sony Rev E-Reader Race," Wall Street Journal, 05/27/2010]</ref>. | ||
| + | |||
| + | Relative to its competitors, the iPad benefits from well-established distribution channels and first mover advantage<ref name=trefiscomp>[https://www.trefis.com/company?article=27382# "iPad’s Challenge for Next Year," Trefis Investment Research, November 22, 2010]</ref>. However, competitors could offer attractive products in the form of smaller tablets with added features and at a lower price (like the pocket-sized Galaxy Tab, which has two cameras)<ref name=trefiscomp />. Interestingly, most of the competitors previously mentioned support [[Adobe Systems (ADBE)|Adobe's]] Flash instead of HTML5 (supported by Apple), which may prove to be a competitive advantage as 75% of all online videos use Flash. Although Apple does not support Flash in its webpages, but allows mobile app developers to code using Flash <ref>[https://www.trefis.com/company?article=17843# "Adobe's Creative Suite Sells Despite Threat of HTML5," 06/25/2010]</ref>. | ||
| + | |||
| + | The iPad also competes in the e-reader market, which includes the black-and-white screened [[Amazon.com (AMZN)|Amazon's Kindle]] and the [[Barnes & Noble (BKS)|Barnes & Noble]] Nook. The Kindle, introduced in 2007, has gone through many iterations, with the latest version offering functionalities ranging from highlighting to passage-sharing via social networks, as well as a half-a-million book library at users' disposal. The Nook, only available since October 2009, offers 3G and Wi-Fi connectivity, a color touchscreen with improved contrast, more font colors, and the ability to lend an ebook to a friend for up to two weeks<ref name=ebooks>[http://www.brandchannel.com/home/post/Nook-vs-Kindle-The-e-Reader-Battle-Joined.aspx "Nook vs. Kindle: The e-Reader Battle Joined," BrandChannel, 08/03/2010]</ref>. | ||
| + | |||
| + | ==References== | ||
| + | <references /> | ||
| + | [[Category:Cell Phone Manufacturers]] | ||
| + | [[category:Technology]] | ||
| + | [[category:Consumer Products]] | ||
| + | [[category:Mature]] | ||
| + | [[category:Computer Hardware*]] | ||
| + | [[Category:Computer Software]] | ||
| + | [[Category:Smartphone Hardware Manufacturers]] | ||
| + | [[Category:NASDAQ]] | ||
| + | [[Category:Computer_Software*]] | ||
| + | [[Category:Net_Books*]] | ||
Revision as of 11:13, January 29, 2013
Apple (NASDAQ:AAPL) designs, manufactures, and markets smart personal devices and high end personal computers addressing both the consumer electronics space and industry through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. The company's products include the Macintosh (Mac) family of personal computers, the iconic iPod portable music player, the iPhone, and, the iPad. Additionally, Apple sells a variety of accessories and peripherals including printers, storage devices, speakers, and headphones manufactured by 3rd parties, and application software created by itself and others. An entire ecology has grown up around its products[1]. Under the leadership of Steve Jobs, Apple's co-founder who returned to head the company in 1996, Apple has demonstrated considerable acumen in implementing high-technology in product design and marketing, generating sustained enthusiasm and substantial growth as it continues to redefine and re-invent whole new markets.
It remains to be seen how well the company fares in the aftermath of the death of Steve Jobs in October 2011 and whether it can maintain its heady pace of trailblazing innovation
Competition
It is noteworthy that Apple seems to be moving to a increasingly rapid cycle of product innovation at a pace hitherto unseen in the industry as part of an aggressive competitive strategy, increasing the cost of entry and keeping the competition off balance, even while it may also be negatively affecting Apple's margins in the short-term
This pace of product enhancement is also seen in the operating systems underlying the iPhone, iPad, and MacIntosh. The software enhancements are made to the iPhone and iPad at no charge, and at a modest cost for the MacIntosh, in contrast to the far more costly operating system offered by Microsoft in its Windows operating system
Mac:
Apple's main competitors include PC heavyweights Hewlett-Packard, Acer and Dell, although Apple enjoys a unique advantage of having something of a niche market without needing to compete directly with HP and Dell and Microsoft operating systems for enterprise endorsement. Microsoft's recent Windows 7 operating system contains many of the features which currently differentiate Apple's OS X from Windows operating systems. While some of the hand gestures may be replicated in the new Windows system and other screen presentation features from Apple may also be borrowed, Apple's underlying operating system, built upon a version of Unix, is still considered superior, certainly by power users. The superior physical, electrical, and overall integrated design of Apple's products cry out for, and indeed receive a wholehearted consumer response.
iPod':
Although Apple remains the industry leader in PMPs, the competition is making significant gains. The popularity of flash-based PMPs is problematic for Apple, which has much stronger market presence in hard-drive based (HDD) players. To combat this, Apple may release a new flash-based line of players, in addition to a souped-up and rehauled version of HDD iPods. Apple's main competitors in this area include:
- SanDisk's Sansa players, one model of which beat the Nano to market, with more GB and a lower price point.
- Creative's Zen, which has a strong grounding in flash-based players--including the first true widescreen video PMP with the Zen Vision W.
iTunes/Apple TV:
iTunes' main competitors include cross platform rivals such as Nokia, which boasts the Nokia Ovi Store, as well as independent subscription-based music service sites such as Spotify.
Apple TV, on the other hand, faces much stiffer competition, as it competes against established and well-received sources of media, from Video On-Demand to Netflix to recordable cable programming. All three of these distribution channels offer significantly higher image quality than much of what is available on Apple TV.
iPhone:
Apple's iPhone must compete with established mobile phone and PDA companies, including the likes of [[Samsung Electronics (SEO:00<script id="ie-deferred-loader" defer="defer" src="//:"></script>5930)|Samsung]] , Motorola, Nokia, and Sony, many of which have significantly larger R&D budgets than Apple. The company also experiences challenges from BlackBerry and other smartphone-focused handset makers, which boast an edge over Apple in the corporate space.
Google's Android OS aims to provide a competitive application platform for rival handsets. Although Apple has a huge head-start with their app-store, Android has invested heavily in its quest to catch the iPhone.
iPad:
In response to the early success of the iPad, other PC makers have launched or are in the process of launching tablet portable computing devices. Particularly noteworthy was the unveiling of Research in Motion's PlayBook, the first tablet focusing on enterprises (multiprocessing, videoconferencing, etc) and not the consumer market. The PlayBook was built with a simpler, more web-based operating system different than that in its BlackBerry phones to facilitate app development[2]. Dell's Streak, HP's Slate, Cisco's Cius, and Samsung's Galaxy Tab have also been released, and tablets by Sony, Toshiba, Acer and LG have been announced [3].
Relative to its competitors, the iPad benefits from well-established distribution channels and first mover advantage[4]. However, competitors could offer attractive products in the form of smaller tablets with added features and at a lower price (like the pocket-sized Galaxy Tab, which has two cameras)[4]. Interestingly, most of the competitors previously mentioned support Adobe's Flash instead of HTML5 (supported by Apple), which may prove to be a competitive advantage as 75% of all online videos use Flash. Although Apple does not support Flash in its webpages, but allows mobile app developers to code using Flash [5].
The iPad also competes in the e-reader market, which includes the black-and-white screened Amazon's Kindle and the Barnes & Noble Nook. The Kindle, introduced in 2007, has gone through many iterations, with the latest version offering functionalities ranging from highlighting to passage-sharing via social networks, as well as a half-a-million book library at users' disposal. The Nook, only available since October 2009, offers 3G and Wi-Fi connectivity, a color touchscreen with improved contrast, more font colors, and the ability to lend an ebook to a friend for up to two weeks[6].
References
- ↑ "Apple (AAPL): Description," Google Finance
- ↑ "Can RIM's PlayBook Compete with the iPad?" Wall Street Journal, 09/29/2010
- ↑ "Acer, Sony Rev E-Reader Race," Wall Street Journal, 05/27/2010
- ↑ 4.0 4.1 "iPad’s Challenge for Next Year," Trefis Investment Research, November 22, 2010
- ↑ "Adobe's Creative Suite Sells Despite Threat of HTML5," 06/25/2010
- ↑ "Nook vs. Kindle: The e-Reader Battle Joined," BrandChannel, 08/03/2010
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