Apple 1997 Annual Report Download - page 8

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 seasonal demand related to the beginning of the school year and the holiday
season. However, past performance should not be considered a reliable indicator of the Company's future revenue or financial performance.
WARRANTY
The Company offers a parts and labor limited warranty on its hardware products. The warranty period is typically 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.
SIGNIFICANT CUSTOMERS
No customer accounted for more than 10% of the Company's net sales in 1997, 1996 or 1995.
BACKLOG
For information regarding the Company's backlog, refer to Part II, Item 7 of this Form 10-K, under the subheading "Backlog", which is
included under the heading "Net Sales", which information is hereby incorporated by reference.
COMPETITION
The market for the design, manufacture and sale of personal computers, personal communications devices, and related software and peripheral
products is highly competitive. It continues to be characterized by rapid technological advances in both hardware and software development
that have substantially increased the capabilities and applications of these products, and has resulted in the frequent introduction of new
products. The principal competitive factors in this market are relative price/performance, product quality and reliability, availability of
software, product features, marketing and distribution capability, service and support, availability of hardware peripherals, and corporate
reputation.
The Company is currently the primary maker of hardware that uses the Mac OS. The Mac OS has a minority market share in the personal
computer market, which is dominated by makers of computers that run the Microsoft Windows 95 and Windows NT operating systems. The
Company believes that the Mac OS, with its perceived advantages over Windows, and the general reluctance of the Macintosh installed base to
incur the costs of switching platforms, have been driving forces behind sales of the Company's personal computer hardware for the past several
years. Recent innovations in the Windows platform, including those included in Windows 95 and Windows NT, or those expected to be
included in a new version of Windows to be introduced in 1998, have added features to the Windows platform that make the differences
between the Mac OS and Microsoft's Windows operating systems less significant. The Company is currently taking and will continue to take
steps to respond to the competitive pressures being placed on its personal computer sales as a result of the recent innovations in the Windows
platform. The Company's future consolidated operating results and financial condition is substantially dependent on its ability to maintain
continuing improvements on the Macintosh platform in order to maintain perceived functional advantages over competing platforms.
Further discussion relating to the competitive conditions of the personal computing industry and the Company's competitive position in the
market place may be found in Part II, Item 7 of this Form 10-K under the subheading "Competition," included under the heading "Factors That
May Affect Future Results and Financial Condition," and in Part II, Item 8 on this Form 10-K in the Notes to Consolidated
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