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Table of Contents
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, which are incorporated herein by reference. 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 a range of personal computers, mobile communication and media devices, and portable digital
music players, and sells a variety of related software, services, peripherals, networking solutions, and third-
party digital content and applications.
The Company’
s products and services include Mac computers, iPhone, iPad, iPod, Apple TV, Xserve, a portfolio of consumer and professional
software applications, the Mac OS X and iOS operating systems, third-
party digital content and applications through the iTunes Store, and a
variety of accessory, service and support offerings. The Company sells its products worldwide through its retail stores, online stores, and direct
sales force, and third-party cellular network carriers, wholesalers, retailers, and value-
added resellers. In addition, the Company sells a variety of
third-
party Mac, iPhone, iPad and iPod 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 SMB, education, enterprise, government, and
creative markets.
The Company is committed to bringing the best user experience to its customers through its innovative hardware, software, peripherals, services,
and Internet offerings. The Company’
s business strategy leverages its unique ability to design and develop its own operating systems, 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. Within the iTunes Store, the
Company has expanded its offerings through the App Store and iBookstore, which allow customers to browse, search for, and purchase third-
party applications and books through either a Mac or Windows-
based computer or by wirelessly downloading directly to an iPhone, iPad or iPod
touch. The Company also works to support a community for the development of third-
party software and hardware products and digital content
that complement the Company’s offerings. Additionally, the Company’
s strategy includes expanding its distribution network to effectively reach
more customers and provide them with a high-quality sales and post-
sales support experience. 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 computers; mobile communications
and media devices with its iPhone, iPad and iPod product families; and distribution of third-
party digital content and applications with its online
iTunes Store. While the Company is widely recognized as a leading innovator in the markets where it competes, 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; the Mac OS X and iOS
operating systems; application software for
27
Item 7.
Management
’
s Discussion and Analysis of Financial Condition and Results of Operations