Apple 2007 Annual Report Download - page 22

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end-user contracts, iPhone sales may be adversely affected. Because the Company's agreements require each carrier to make revenue-generating
payments to the Company, a carrier's non-performance under or termination of an agreement, or its inability to attract and retain iPhone
customers, could have a material adverse effect on the Company's future financial condition and operating results. If, contrary to the Company's
license agreements or product specifications, an iPhone is "unlocked" from an authorized carrier's network, the Company would not receive
payments related to that iPhone from such carrier, which could have a material adverse effect on the Company's future financial condition and
operating results. The Company may choose to enter into arrangements with carriers in other countries or regions, and the same risks described
above would also apply to those arrangements.
The Company is subject to risks associated with laws, regulations and industry-imposed standards related to mobile communications devices.
Laws and regulations related to mobile communications devices in the many jurisdictions in which the Company operates are extensive and
subject to change. Such changes, which could include but are not limited to restrictions on production, manufacture, distribution, and use of the
device, locking the device to a carrier's network, or mandating the use of the device on more than one carrier's network, may have a material
adverse effect on the Company's financial condition and operating results.
Mobile communication devices, such as iPhone, are subject to certification and regulation by governmental and standardization bodies, as well
as by cellular network carriers for use on their networks. These certification processes are extensive and time consuming, and could result in
additional testing requirements, product modifications or delays in product shipment dates, which may have a material adverse effect on the
Company's financial condition and operating results.
Failure of information technology systems and breaches in data security could adversely affect the Company's financial condition and operating
results.
Information technology system failures and breaches of data security could disrupt the Company's operations by causing delays or cancellation
of customer orders, impeding the manufacture or shipment of products, or resulting in the unintentional disclosure of customer or Company
information. Management has taken steps to address these concerns by implementing sophisticated network security and internal control
measures. There can be no assurance, however, that a system failure or data security breach will not have a material adverse effect on the
Company's financial condition and operating results.
The Company's stock price may be volatile.
The Company's stock has at times experienced substantial price volatility as a result of variations between its actual and anticipated financial
results and as a result of announcements by the Company and its competitors. The stock market as a whole has also experienced extreme price
and volume fluctuations that have affected the market price of many technology companies in ways that may have been unrelated to these
companies' operating performance. Furthermore, the Company believes its stock price reflects high future growth and profitability expectations.
If the Company fails to meet these expectations its stock price may significantly decline.
Economic conditions, political events, war, terrorism, public health issues, natural disasters and other circumstances could materially adversely
affect the Company.
The Company's operations and performance depend significantly on worldwide economic conditions. War, terrorism, geopolitical uncertainties,
public health issues, and other business interruptions have caused and could cause damage or disruption to international commerce and the
global economy, and thus may have a strong negative effect on the Company, its suppliers, logistics providers, manufacturing vendors and
customers. The Company's business operations are subject to interruption by natural disasters, fire, power shortages, terrorist attacks, and other
hostile acts, labor disputes, public health issues, and other events beyond its control. Such events could decrease demand for the Company's
products, make it difficult or
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