Apple 2009 Annual Report Download - page 39

Table of Contents
The Company is focused on providing innovative products and solutions to consumer, SMB, education, enterprise, government and creative
customers that greatly enhance their evolving digital lifestyles and work environments. The Company’
s overall business strategy is to control the
design and development of the hardware and software for all of its products, including the personal computer, mobile communications and
consumer electronics devices. The Company’
s business strategy leverages its unique ability to design and develop its own operating system,
hardware, application software, and services to provide its customers new products and solutions with superior ease-of-
use, seamless integration,
and innovative industrial design. The Company believes continual investment in research and development is critical to the development and
enhancement of innovative products and technologies. In conjunction with its strategy, the Company continues to build and host a robust
platform for the discovery and delivery of third-
party digital content and applications through the iTunes Store. Most recently the Company
launched the App Store that allows users to browse, search for, and purchase third-party applications through either a Mac or Windows-
based
computer or by wirelessly downloading directly to an iPhone or iPod touch. The Company also desires to support a community for the
development of third-party products that complement the Company’
s offerings through its developer programs. The Company is therefore
uniquely positioned to offer superior and well-integrated digital lifestyle and productivity solutions.
The Company participates in several highly competitive markets, including personal computers with its Mac line of personal computers, mobile
communications with iPhone, consumer electronics with its iPod product families, and distribution of third-
party digital content and applications
through its online iTunes Store. While the Company is widely recognized as a leading innovator in the personal computer, mobile
communications and consumer electronics markets as well as a leader in the emerging market for distribution of digital content and applications,
these markets are highly competitive and subject to aggressive pricing. To remain competitive, the Company believes that increased investment
in research and development and marketing and advertising is necessary to maintain or expand its position in the markets where it competes. The
Company’
s research and development spending is focused on further developing its existing Mac line of personal computers, its operating
system, application software, iPhone and iPods; developing new digital lifestyle consumer and professional software applications; and investing
in new product areas and technologies. The Company also believes increased investment in marketing and advertising programs is critical to
increasing product and brand awareness.
The Company utilizes a variety of direct and indirect distribution channels. The Company believes that sales of its innovative and differentiated
products are enhanced by knowledgeable salespersons who can convey the value of the hardware, software, and peripheral integration,
demonstrate the unique digital lifestyle solutions that are available on Mac computers, and demonstrate the compatibility of the Mac with the
Windows platform and networks. The Company further believes providing a high-quality sales and after-
sales support experience is critical to
attracting new and retaining existing customers. To ensure a high-
quality buying experience for its products in which service and education are
emphasized, the Company continues to expand and improve its distribution capabilities by opening its own retail stores in the U.S. and in
international markets. The Company had 273 stores open as of September 26, 2009.
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, and the Apple Premium Reseller Program, through which independently run
businesses focus on the Apple platform and provide a high level of customer service and product expertise. The Company believes providing
direct contact with its targeted customers is an efficient way to demonstrate the advantages of its Mac computers and other products over those
of its competitors. The Company also sells to customers directly through its online stores around the world and through its direct sales force.
The Company distributes iPhone in over 80 countries, through its direct channels, its cellular network carriers’
distribution channels and certain
third-party resellers. The Company has signed multi-
year agreements with various cellular network carriers authorizing them to distribute and
provide cellular network services for iPhones. These agreements are generally not exclusive with a specific carrier, except in the U.S., Germany,
Spain, Ireland and certain other countries.
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