Apple 2011 Annual Report Download - page 27

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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 mobile communication and media devices, personal computers, 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 iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications,
the iOS and Mac OS X operating systems, iCloud, and a variety of accessory, service and support offerings. The Company also sells and delivers
digital content and applications through the iTunes Store, App Store, iBookstore, and Mac App Store. The Company sells its products worldwide
through its retail stores, online stores, and direct sales force, as well as through third-
party cellular network carriers, wholesalers, retailers, and
value-added resellers. In addition, the Company sells a variety of third-
party iPhone, iPad, Mac 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 consumers, small and mid-sized businesses, and education, enterprise and government customers.
The Company is committed to bringing the best user experience to its customers through its innovative hardware, software, peripherals, and
services. 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
design. As part of its strategy, the Company continues to expand its platform for the discovery and delivery of third-
party digital content and
applications through the iTunes Store. As part of the iTunes Store, the Company’
s App Store and iBookstore allow customers to discover and
download applications and books through either a Mac or Windows-based computer or through “iOS devices,”
namely iPhone, iPad and iPod
touch. In January 2011, the Company opened the Mac App Store to allow customers to easily discover, download and install applications for
their Macs. The Company also supports a community for the development of third-
party software and hardware products and digital content that
complement the Company’s offerings. The Company’
s strategy also 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 participates in several highly competitive markets, including mobile communications and media devices with its iPhone, iPad and
iPod product families; personal computers with its Mac computers; and distribution of third-
party digital content and applications through the
iTunes Store, App Store, iBookstore, and Mac App 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 continual
investment in research and development and marketing and advertising is critical to the development and sale of innovative products and
technologies. The Company’
s research and development spending is focused on investing in new hardware and software products, and in further
developing its existing products, including iPhone, iPad, Mac, and iPod hardware; iOS and Mac OS X operating systems; and a variety of
application software and online services.
25
Item 7.
Management
’
s Discussion and Analysis of Financial Condition and Results of Operations