Apple 2005 Annual Report Download - page 4

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iPod digital music players, personal digital assistants, cellular phones, digital camcorders and still cameras, CD and DVD players, televisions,
and other consumer electronic devices. The attributes of the personal computer include a high quality user interface, relatively inexpensive data
storage, and the ability to run complex applications and easily connect to the Internet. Apple is the only company in the personal computer
industry that controls the design and development of the entire personal computer—from the hardware and operating system to sophisticated
applications. Additionally, the Company’s products provide innovative industrial design, intuitive ease-of-use, and built-in networking,
graphics and multimedia capabilities. Thus, the Company is uniquely positioned to offer integrated digital hub products and solutions.
The Company develops products and technologies that adhere to many industry standards in order to provide an optimized user experience
through interoperability with peripherals and devices from other companies. The Company has played a role in the development, enhancement,
promotion, and/or use of numerous of these industry standards.
Expanded Distribution
The Company believes that a high quality buying experience with knowledgeable salespersons who can convey the value of the Company’s
products and services is critical to attracting and retaining customers. The Company sells many of its products and resells certain third-party
products in most of its major markets directly to consumers, education customers, and businesses through its retail and online stores in the U.S.
and internationally. The Company has also invested in programs to enhance reseller sales, including the Apple Sales Consultant Program,
which consists of the deployment of Apple employees and contractors to selected third-party reseller locations. The Company believes
providing direct contact with its targeted customers is an efficient way to demonstrate the advantages of its Macintosh computer and other
products over those of its competitors. The Company has significantly increased the points of distribution for the iPod product family in order
to make its products available at locations where its customers shop.
From inception of the retail initiative in 2001 through 2005, the Company had opened 116 retail stores in the U.S. and 8 international stores in
Canada, Japan, and the U.K. The Company opened 2 additional stores in October 2005. The Company has typically located its stores at high
traffic locations in quality shopping malls and urban shopping districts.
One of the goals of the retail initiative is to bring new customers to the Company and expand its installed base through sales to computer users
who currently do not own a Macintosh computer and first time personal computer buyers. By operating its own stores and building them in
desirable high traffic locations, the Company is able to better control the customer retail experience and attract new customers. The stores are
designed to simplify and enhance the presentation and marketing of personal computing products. To that end, retail store configurations have
evolved into various sizes in order to accommodate market demands. The stores employ experienced and knowledgeable personnel who
provide product advice and certain hardware support services. The stores offer a wide selection of third-party hardware, software, and various
other computing products and supplies selected to complement the Company’
s own products. Additionally, the stores provide a forum in which
the Company is able to present 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 and has been committed to delivering tools to help
educators teach and students learn. The Company believes 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
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