Apple 1995 Annual Report Download - page 6

services, and technology, along with a global electronic mail system with news, information and other services. This on-line service also
includes eWorld for Macintosh and NewtonMail (registered trademark), eWorld's messaging service for Newton.
Markets and Distribution
The Company's customers are primarily in the business, education, and consumer markets. Customers are attracted to the Macintosh in
particular for a variety of reasons, including the availability of a wide variety of application software, the reduced amount of training resulting
from the Macintosh's intuitive ease of use, and the ability of the Macintosh to network and communicate with other computer systems and
environments.
Apple personal computers were first introduced to education customers in the late 1970's. In the United States, the Company is one of the major
suppliers of personal computers for both elementary and secondary school customers, as well as for college and university customers. The
Company is also a substantial supplier to institutions of higher education outside of the United States.
In the United States, the Company's formal commitment to serve the federal government began in 1986 with the formation of the Apple Federal
Systems Group. Although the Company has contracts with a number of U.S. government agencies, these contracts are not currently material to
the Company's overall financial condition or results of operations.
Presently, the Americas represent the Company's largest geographic marketplace. The Apple Americas organization focuses on the Company's
sales, marketing, and support efforts in the United States, Canada and Latin America. Products sold in these regions are primarily manufactured
in the Company's facilities in California, Colorado, and Singapore, and distributed from facilities in California and Illinois.
Approximately 45% to 48% of the Company's revenues in recent years has come from its international operations. The Company has two
international sales and marketing divisions, consisting of the Apple Europe division and the Apple Pacific division. The Apple Europe division
focuses on opportunities in Europe as well as in parts of Africa and in the Middle East. Products sold by the Europe division are manufactured
primarily in the Company's facility in Cork, Ireland. The Apple Pacific division focuses on opportunities in Japan and Asia; Australia and New
Zealand; and the Caribbean region. Products sold by the Pacific division are manufactured primarily in the Company's facilities in California,
Colorado and Singapore.
The Company distributes its products through third-party computer resellers, and is also continuing its expansion into various consumer
channels, such as mass merchandise stores, consumer electronics outlets and computer superstores, in response to changing industry practices
and customer preferences. The Company's products are sold primarily to business and government customers through independent resellers,
value- added resellers and systems integrators; to home customers through independent resellers and consumer channels; and to education
customers through direct sales and independent resellers. In order to provide products and service to its independent resellers on a timely basis,
the Company distributes its products through a number of Apple distribution and support centers.
A summary of the Company's Industry Segment and Geographic Information may be found in Part II, Item 8 of this Form 10-K under the
heading "Industry Segment and Geographic Information", which information is hereby incorporated by reference.
Raw materials
Although certain raw materials, processes, and components essential to the Company's business are generally available from multiple sources,
key components and processes currently obtained from single sources include certain of the Company's displays, microprocessors, mouse
devices, keyboards, disk drives, printers and printer components, application- specific integrated circuits ("ASICs") and other custom chips,
and certain processes relating to construction of the plastic housing for the Company's computers. Any availability limitations, interruption in
supplies, or price increases relative to these and other components could adversely affect the Company's business and financial results. In
addition, new products introduced by the Company often initially utilize custom components obtained from only one source, until the Company
has evaluated whether there is a need for an additional supplier. In situations where a component or product utilizes new technologies and
processes, there may be initial capacity constraints until such time as the suppliers' yields have matured. Materials and components are
normally acquired through purchase orders, as is common in the industry, typically covering the Company's requirements for periods from 90
to 180 days. However, the Company continues to evaluate the need for a supply contract in each situation.
If the supply of a key single-sourced material, process, or component to the Company were to be delayed or curtailed, its ability to ship the
related product utilizing such material, process, or component in desired quantities and in a timely manner could be adversely affected. The
Company's business and financial performance could also be adversely affected, depending on the time required to obtain sufficient quantities
from the original source, or to identify and obtain sufficient quantities from an alternate source. The Company believes that the suppliers whose
loss to the Company could have a material adverse effect upon the
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