Apple 2011 Annual Report Download - page 23

Download and view the complete annual report

Please find page 23 of the 2011 Apple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 107

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107

development and corporate functions in Cupertino, California, including land for the future development of the Company’
s second corporate
campus. The Company also owned data centers in Newark, California and in North Carolina. Outside the U.S., the Company owned additional
facilities for various purposes.
The Company believes its existing facilities and equipment are in good operating condition and are suitable for the conduct of its business. The
Company has invested in internal capacity and strategic relationships with outside manufacturing vendors and continues to make investments in
capital equipment as needed to meet anticipated demand for its products.
As of September 24, 2011, the end of the annual period covered by this report, the Company was subject to the various legal proceedings and
claims discussed below, as well as certain other legal proceedings and claims that have not been fully resolved and that have arisen in the
ordinary course of business. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a
material loss, or a material loss in excess of a recorded accrual, with respect to loss contingencies. However, the outcome of legal proceedings
and claims brought against the Company are subject to significant uncertainty. Therefore, although management considers the likelihood of such
an outcome to be remote, if one or more of these legal matters were resolved against the Company in the same reporting period for amounts in
excess of management’s expectations, the Company’
s consolidated financial statements of a particular reporting period could be materially
adversely affected. See the risk factors “ The Company’
s future results could be materially adversely affected if it is found to have infringed on
intellectual property rights. ” and “ Unfavorable results of legal proceedings could materially adversely affect the Company. ”
in Part I, Item 1A
of this Annual Report on Form 10-K under the heading “Risk Factors.”
The Company settled certain matters during the fourth quarter of 2011
that did not individually or in the aggregate have a material impact on the Company’s financial condition and results of operations.
In re Apple & ATTM Antitrust Litigation (brought on behalf of named plaintiffs Kliegerman, Holman, Rivello, Smith, Lee, Macasaddu,
Morikawa, Scotti and Sesso)
This is a purported class action filed against the Company and AT&T Mobility in the United States District Court for the Northern District of
California. The Consolidated Complaint alleges that the Company and AT&T Mobility violated the federal antitrust laws by monopolizing
and/or attempting to monopolize the “aftermarket for voice and data services”
for the iPhone and that the Company monopolized and/or
attempted to monopolize the “aftermarket for software applications for iPhones.”
Plaintiffs are seeking unspecified compensatory and punitive
damages for the class, treble damages, injunctive relief and attorneys fees. On July 8, 2010 the Court granted in part plaintiffs’
motion for class
certification. Following a favorable Supreme Court ruling for AT&T Mobility in its case against Conception, defendants have filed Motions to
Compel Arbitration and to Decertify the Class.
The Apple iPod iTunes Antitrust Litigation (formerly Charoensak v. Apple Computer, Inc. and Tucker v. Apple Computer, Inc.); Somers v. Apple
Inc.
These related cases have been filed on January 3, 2005, July 21, 2006 and December 31, 2007 in the United States District Court for the
Northern District of California on behalf of a purported class of direct and indirect purchasers of iPods and iTunes Store content, alleging various
claims including alleged unlawful tying of music and video purchased on the iTunes Store with the purchase of iPods and unlawful acquisition
or maintenance of monopoly market power and unlawful acquisition or maintenance of monopoly market power under §§1 and 2 of the Sherman
Act, the Cartwright Act, California Business & Professions Code §17200 (unfair competition), the California Consumer Legal Remedies Act and
California monopolization law. Plaintiffs are seeking unspecified compensatory and punitive damages for the class, treble damages, injunctive
relief, disgorgement of revenues and/or profits and attorneys fees. Plaintiffs are also seeking DRM free versions of any songs downloaded from
iTunes or an order requiring the Company to license its DRM to all competing music players. The cases are currently pending.
21
Item 3.
Legal Proceedings