Apple 1994 Annual Report Download - page 8

Patents, trademarks, copyrights and licenses
The Company currently holds rights to patents and copyrights relating to certain aspects of its computer and peripheral systems. In addition, the
Company has registered, and/or has applied to register, trademarks in the United States and a number of foreign countries for "Apple", the
Apple silhouette logo, the Apple color logo, "Macintosh", Newton, the Newton Lightbulb logo, and numerous other product trademarks. In
1986, the Company acquired ownership of the trademark "Macintosh" for use in connection with computer products. Although the Company
believes that the ownership of such patents, copyrights, and trademarks is an important factor in its business and that its success does depend in
part on the ownership thereof, the Company relies primarily on the innovative skills, technical competence, and marketing abilities of its
personnel.
Because of technological changes in the computer industry, current extensive patent coverage, and the rapid rate of issuance of new patents, it
is possible that certain components of the Company's products may unknowingly infringe existing patents of others. The Company believes the
resolution of any claim of infringements would not have a material adverse effect on its financial condition and results of operations as reported
in the accompanying financial statements. However, depending on the amount and timing of an unfavorable resolution of any such claims of
infringement, it is possible that the Company's future results of operations or cash flow could be materially affected in a particular period. The
Company has from time to time entered into cross-licensing agreements with other companies.
The Company is engaged in certain litigation relating to its intellectual property. A description of such litigation is set forth in the footnote to
the financial statements under the subheading "Litigation" included under the heading entitled "Commitments and Contingencies" in Part II,
Item 8 of this Form 10-K (Microsoft/Hewlett-Packard, Lemelson and Grant litigation), which information is hereby incorporated by reference.
Seasonal business
Although the Company does not consider its business to be highly seasonal, it has historically experienced increased sales in its first and fourth
fiscal quarters, compared to other quarters in its fiscal year, due to holiday demand for and calendar year-end buying of some of its products.
Warranty
The Company offers a parts and labor limited warranty on its products. The warranty period is one year from the date of purchase by the end
user. The Company also offers a 90-day warranty for Apple service parts used to repair Apple hardware products. In addition, consumers may
purchase extended service coverage on all Apple hardware products.
Customers
No customer of the Company accounted for 10% or more of net sales for fiscal year 1994.
Backlog
In general, the Company's resellers typically purchase products on an as- needed basis due to the Company's distribution strategy, which is
designed to expedite the filling of orders. Resellers frequently change delivery schedules and order rates depending on changing market
conditions. Unfilled orders (backlog) can be, and often are, canceled at will. The Company attempts to fill orders on the requested delivery
schedules. However, products may be in relatively short supply from time to time until production volumes have reached a level sufficient to
meet demand or if other constraints exist. The Company's backlog of unfilled orders remained relatively unchanged at approximately $663
million at both December 2, 1994, and November 19, 1993. The Company expects that substantially all of its orders in backlog at December 2,
1994 will be either shipped or canceled during fiscal 1995.
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