Apple 2007 Annual Report Download - page 39

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
This section and other parts of this Form 10-K contain forward-looking statements that involve risks and uncertainties. Forward-looking
statements can also be identified by words such as "anticipates," "expects," "believes," "plans," "predicts," and similar terms. Forward-looking
statements are not guarantees of future performance and 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
"Risk Factors" above. The following discussion should be read in conjunction with the consolidated financial statements and notes thereto
included in Item 8 of this Form 10-K. All information presented herein is based on the Company's fiscal calendar. Unless otherwise stated,
references in this report to particular years or quarters refer to the Company's fiscal years ended in September and the associated quarters of
those fiscal years. The Company assumes no obligation to revise or update any forward-
looking statements for any reason, except as required by
law.
Executive Overview
The Company designs, manufactures, and markets personal computers, portable digital music players, and mobile communication devices and
sells a variety of related software, services, peripherals, and networking solutions. The Company's products and services include the Mac® line
of desktop and portable computers, the iPod line of portable digital music players, iPhone, Apple TV, Xserve®,
and Xserve RAID, a portfolio of
consumer and professional software applications, the Mac OS® X operating system, third-
party digital content through the iTunes Store™, and a
variety of accessory, service and support offerings. The Company sells its products worldwide through its online stores, its retail stores, its direct
sales force, and third-party wholesalers, resellers, and value-added resellers. In addition, the Company sells a variety of third-party Mac, iPod
and iPhone compatible products, including application software, printers, storage devices, speakers, headphones, and various other accessories
and peripherals through its online and retail stores. The Company sells to education, consumer, creative professional, business, and government
customers. Further discussion of the Company's products may be found in Part I, Item 1 of this Form 10-K under the heading "Business."
The Company believes that for both professionals and consumers the personal computer has become the center of an evolving digital lifestyle by
integrating with and enhancing the utility of advanced digital devices such as the Company's iPods, iPhones, digital video and still cameras,
televisions, personal digital assistants, and other digital devices. The attributes of the personal computer that enable this functionality include a
high-quality user interface, easy access to relatively inexpensive data storage, the ability to run complex applications, and the ability to connect
easily to a wide variety of other digital devices and to the Internet. The Company is the only participant 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.
This, along with its products' creative industrial designs, intuitive ease-of-use, and built-in graphics, multimedia and networking capabilities,
uniquely positions the Company to offer innovative integrated digital lifestyle solutions.
The Company's business strategy leverages its ability, through the design and development of its own operating system, hardware, and many
software applications and technologies, to bring to its customers around the world compelling new products and solutions with superior ease-of-
use, seamless integration, and innovative industrial design.
The Company participates in several highly competitive markets, including personal computers with its Mac line of computers, consumer
electronics with its iPod product family of portable digital music players, and distribution of third-party digital content through its online iTunes
Store. With the introduction of iPhone, the Company has also begun to compete with mobile communication device companies that have
substantial experience and technological and financial resources. While the Company is widely recognized as a leading innovator in the personal
computer and consumer electronics markets as well as a leader in the emerging market for distribution of digital content, these markets are
highly competitive and subject to
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