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PART I
Item 1. Business
General
Apple Computer, Inc. ("Apple" or the "Company") was incorporated under the laws of the State of California on January 3, 1977. The
Company's principal executive officers are located at 1 Infinite Loop, Cupertino, California, 95014 and its telephone number is (408) 996-
1010.
The Company designs, manufactures and markets microprocessor-based personal computers and related personal computing products for sale
primarily to business, education, home, and government customers. Substantially all of the Company's net sales to date have been derived from
the sale of personal computers from its Apple Macintosh (registered trademark) line of computers and related software and peripherals. The
Company operates in one principal industry segment across geographically diverse marketplaces.
Apple delivers a full range of information solutions to people in a wide variety of growing markets. The Company's strategy is to maintain and
expand its market share in the personal computer industry while developing and expanding new related businesses, such as its businesses in on-
line services, licensing of the Macintosh operating system, client/server systems and personal interactive electronics.
During 1995, the Company continued a major product transition to Power Macintosh (registered trademark), its line of Macintosh computers
based on the PowerPC (registered trademark) architecture, a Reduced Instruction Set Computing ("RISC") microprocessor jointly developed by
Apple, International Business Machines Corporation ("IBM") and Motorola, Inc. The Company believes that these PowerPC based products
yield significant improvements in price/performance and functionality compared with its products built using the Motorola 68000 series of
Complex Instruction Set Computing ("CISC") microprocessors. Further information regarding this product transition may be found in Part II,
Item 7 of this Annual Report on Form 10-K (the "Form 10-K") under the subheading "Product Introductions and Transitions" included under
the heading "Factors That May Affect Future Results and Financial Condition," which information is hereby incorporated by reference.
The Company announced the licensing of the Macintosh operating system ("Mac OS") to other personal computer vendors in January 1995 in
an effort to increase overall market share. Several vendors are currently selling product which utilizes Mac OS. The Company believes that
licensing the operating system will result in a broader installed base on which software vendors can develop and provide technical innovations
for the Macintosh platform. Further information regarding the licensing of the Mac OS may be found in Part II, Item 7 of this Form 10-
the subheading "Competition" included under the heading "Factors That May Affect Future Results and Financial Condition", which
information is hereby incorporated by reference.
Principal products
The Company offers a wide range of personal computing products, including personal computers, related peripherals, software, and networking
and connectivity products.
Personal Computing Products
Apple Macintosh personal computers were first introduced in 1984, and are characterized by their intuitive ease of use, innovative applications
base, and built-in networking, graphics and multimedia capabilities.
Currently, the Company uses two types of microprocessors in its line of personal computing products: the PowerPC RISC-based
microprocessor, and the Motorola 68000 CISC-based microprocessor. The majority of the Company's products are built using the PowerPC
RISC-based microprocessor, which include the Power Macintosh (registered trademark) family of personal computers and certain products
within the Macintosh Performa (registered trademark) and the PowerBook families of personal computers. Products currently based on the
Motorola series of CISC-based microprocessors include the Macintosh LC, and certain products within the Macintosh Performa and the
PowerBook families of personal computers. Generally, products based on the Motorola series of microprocessors can also be upgraded to take
advantage of the PowerPC processor. The Company also offers DOS compatible systems which include built-in 68LC040 and 486DX2
processors enabling them to run applications, games, and CD-ROM titles for MS-DOS 6.2 and Windows 3.1 operating systems as well as the
Mac(trademark)OS operating system.
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