Apple 2003 Annual Report Download - page 4

Since inception of its retail initiative in 2001, the Company has opened 65 retail stores in the United States through fiscal year 2003 and during
the first quarter of 2004 opened 9 additional stores, including its first international store in the Ginza in Tokyo, Japan. The Company has
located its stores at high traffic
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locations in quality shopping malls and urban shopping districts. In addition to its own hardware, software and peripheral products, the
Company's stores carry a variety of third-party hardware and software products.
One of the main goals of the retail initiative is to bring new customers to the Company and expand its installed base through sales to both first
time personal computer buyers and those switching to the Macintosh platform from competing operating system platforms. By operating its
own stores, the Company is able to better control the customer retail experience. The stores are designed to simplify and enhance the
presentation and marketing of personal computing products. To that end, retail store configurations have expanded to various sizes in order to
accommodate market demands. The stores employ experienced and knowledgeable personnel, provide post-sale advice and support, offer a
wide selection of third-party products selected to complement the Company's own products, host training and marketing presentations, and
provide certain hardware support services. Additionally, the stores provide a forum in which the Company is able to present entire computing
solutions to users in areas such as digital photography, digital video, music, children's software, and home and small business computing.
Education
For more than 25 years, the Company has focused on the use of technology in education. The Company believes that effective integration of
technology into classroom instruction can result in higher levels of student achievement, especially when used to support collaboration,
information access, and the expression and representation of student thought and ideas. The Company provides a range of products and
services designed to help schools maximize their investments in technology. This is manifested in many of the Company's products and
services, including hardware products like the eMac™ and the iBook® that are designed to meet the needs of education customers, video
editing solutions, wireless networking capabilities, student information systems, one-to-one learning solutions, and high-
quality curriculum and
professional development solutions.
Creative Professionals
Creative professionals constitute one of the Company's most important markets for both hardware and software products. This market is also
important to many third-party developers who provide Macintosh compatible hardware and software solutions. Creative customers utilize the
Company's products for a variety of creative activities including digital video and film production and editing; digital video and film special
effects, compositing, and titling; digital still photography; graphic design, publishing, and print production; music performance and production;
audio production and sound design; and web design, development, and administration.
The Company designs its high-end hardware solutions, including servers and desktop and portable Macintosh systems, to incorporate the
power, expandability, and features desired by creative professionals. Additionally, the Company's operating system, Mac OS X, incorporates
powerful graphics and audio technologies and features developer tools to optimize system and application performance when running powerful
creative solutions provided by the Company or by third-party developers. The Company also offers various software solutions to meet the
needs of its creative customers, many of which are described below.
Business Organization
The Company manages its business primarily on a geographic basis. The Company's reportable operating segments are the Americas, Europe,
Japan, and Retail. The Americas segment includes both North and South America, except for the activities of the Company's Retail segment.
The Europe segment includes European countries as well as the Middle East and Africa. The Japan segment includes only Japan, except for the
activities of the Company's Retail segment. The Retail segment currently operates Apple-
owned retail stores in the United States and in the first
quarter of fiscal 2004, opened its first international store in Tokyo, Japan. Other operating segments include Asia-Pacific, which includes
Australia and Asia except for
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Japan, and the Company's subsidiary, FileMaker, Inc. Each reportable operating segment provides similar hardware and software products and
similar services. Further information regarding the Company's operating segments may be found in Part II, Item 7 of this Form 10-K under the
heading "Segment Operating Performance," and in Part II, Item 8 on this Form 10-K in the Notes to Consolidated Financial Statements at
Note 11, "Segment Information and Geographic Data."
Hardware Products