Apple 2002 Annual Report Download - page 3

Download and view the complete annual report

Please find page 3 of the 2002 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference to Part III of this
Form 10-K or any amendment to this Form 10-K. 12
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes 12 No 32
The aggregate market value of voting stock held by nonaffiliates of the Registrant was approximately $4,925,788,282 as of December 6, 2002,
based upon the closing price on the NASDAQ National Market reported for such date. Shares of Common Stock held by each executive officer
and director and by each person who beneficially owns more than 5% of the outstanding Common Stock have been excluded in that such
persons may under certain circumstances be deemed to be affiliates. This determination of executive officer or affiliate status is not necessarily
a conclusive determination for other purposes.
359,135,584 shares of Common Stock Issued and Outstanding as of December 6, 2002
PART I
The Business section and other parts of this Annual Report on Form 10-K ("Form 10-K") contain forward-
looking statements that involve risks
and uncertainties. The Company's actual results may differ significantly from the results discussed in the forward-looking statements. Factors
that might cause such differences include, but are not limited to, those discussed in the subsection entitled "Factors That May Affect Future
Results and Financial Condition" under Part II, Item 7 of this Form 10
-K.
Item 1. Business
Company Background
Apple Computer, Inc. ("Apple" or the "Company") was incorporated under the laws of the State of California on January 3, 1977. The
Company designs, manufactures and markets personal computers and related personal computing solutions for sale primarily to education,
creative, consumer, and business customers. Substantially all of the Company's net sales over the last five years have been derived from the
sale of its Apple® Macintosh® line of personal computers and related software and peripherals. The Company's fiscal year 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.
Business Strategy
Digital Hub
Apple is committed to bringing the best possible personal computing experience to students, educators, creative professionals, businesses and
consumers around the world through its innovative hardware, software, and Internet offerings. The Company believes that personal computing
has entered a new era in which the personal computer functions for both professionals and consumers as the digital hub for advanced new
digital devices such as digital music players, personal digital assistants, cellular phones, digital still and movie cameras, CD and DVD players,
and other electronic devices. The attributes of the personal computer, including its ability to run complex applications, possess a high quality
user interface, contain large and relatively inexpensive storage, and easily connect to the Internet in multiple ways and at varying speeds, can
individually add value to these devices and interconnect them as well. Apple is the only company in the personal computer industry that
designs and manufactures the entire personal computer—from the hardware and operating system to sophisticated applications. Apple ties it all
together with its innovative industrial design, intuitive ease-of-use, and built-in networking, graphics, and multimedia capabilities. Thus, the
Company is uniquely positioned to offer digital hub products and solutions.
Apple develops products and technologies that adhere to many industry standards in order to provide an optimized user experience through
interoperability. Apple has played a role in the development, enhancement, promotion, and/or use of numerous of these industry standards,
many of which are discussed below.
Retail
Since inception of its retail initiative in 2001, the Company has opened 51 retail stores in the United States. The Company has located its stores
at quality high traffic locations in shopping malls and urban shopping districts. Before the end of the first quarter of 2003, the Company
estimates that over 30% of the U.S. population will live within 15 miles of one of its stores. In addition to its own hardware and software
products, the Company's retail stores carry in inventory a variety of third
-
party hardware and software products.