Apple 2006 Annual Report Download - page 9

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Expanded Distribution
The Company believes a high-quality buying experience with knowledgeable salespersons that can convey the value of the Company’s
products and services greatly enhances its ability to attract and retain 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.
The Company has also invested in programs to enhance reseller sales, including the Apple Sales Consultant Program, which places Apple
employees and contractors at 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.
By the end of fiscal 2006, the Company had opened a total of 165 retail stores, including 147 stores in the U.S. and a total of 18 stores in
Canada, Japan, and the U.K. The Company opened 5 additional stores in October and November 2006. 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 computers and related 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 offer specialized service and personalized training.
Education
Throughout its history, 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 of
student thought and ideas. The Company creates solutions that enable new modes of curriculum delivery, better ways of conducting research,
and opportunities for professional development of faculty, students, and staff. The Company has designed a range of products and services to
meet the needs of education customers. These products and services include the iMac™ and the MacBook®, video creation and editing
solutions, wireless networking, professional development solutions, and one-to-one (1:1) learning solutions. A 1:1 learning solution typically
consist of a portable computer for every student and teacher along with the installation of a wireless network .
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 activities including digital video and film production and editing; digital video and film special effects,
compositing and titling; digital still photography and workflow management; graphic design, publishing, and print production; music creation
and production; audio production and sound design; and web design, development, and administration.
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