Apple 2014 Annual Report Download - page 7

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Product Support and Services
AppleCare®offers a range of support options for the Company’s customers. These include assistance that is built into software
products, printed and electronic product manuals, online support including comprehensive product information as well as
technical assistance, the AppleCare Protection Plan (“APP”) and the AppleCare+ Protection Plan (“AC+”). APP is a fee-based
service that typically includes two to three years of phone support, hardware repairs and dedicated web-based support
resources. AC+ is a fee-based service available in certain countries for iPhone and iPad. AC+ offers additional coverage under
some circumstances for instances of accidental damage in addition to the services offered by APP.
Markets and Distribution
The Company’s customers are primarily in the consumer, SMB, education, enterprise and government markets. The Company
sells its products and resells third-party products in most of its major markets directly to consumers and SMBs through its retail
and online stores and its direct sales force. The Company also employs a variety of indirect distribution channels, such as third-
party cellular network carriers, wholesalers, retailers and value-added resellers. During 2014, the Company’s net sales through
its direct and indirect distribution channels accounted for 28% and 72%, respectively, of total net sales.
The Company believes that sales of its innovative and differentiated products are enhanced by knowledgeable salespersons
who can convey the value of the hardware and software integration and demonstrate the unique solutions that are available on
its products. The Company further believes providing direct contact with its targeted customers is an effective way to
demonstrate the advantages of its products over those of its competitors and 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 build and improve its distribution capabilities by expanding the number of its own retail stores worldwide. The
Company’s retail stores are typically located at high-traffic locations in quality shopping malls and urban shopping districts. By
operating its own stores and locating them in desirable high-traffic locations the Company is better positioned to ensure a high
quality customer buying experience and attract new customers. The stores are designed to simplify and enhance the
presentation and marketing of the Company’s products and related solutions. The retail stores employ experienced and
knowledgeable personnel who provide product advice, service and training and offer a wide selection of third-party hardware,
software and other accessories that complement the Company’s products.
The Company has also invested in programs to enhance reseller sales by placing high-quality Apple fixtures, merchandising
materials and other resources within selected third-party reseller locations. Through the Apple Premium Reseller Program,
certain third-party resellers focus on the Apple platform by providing a high level of product expertise, integration and support
services.
The Company is committed to delivering solutions to help educators teach and students learn. The Company believes effective
integration of technology into classroom instruction can result in higher levels of student achievement and has designed a
range of products, services and programs to address the needs of education customers. The Company also supports mobile
learning and real-time distribution of, and access to, education related materials through iTunes U, a platform that allows
students and teachers to share and distribute educational media online. The Company sells its products to the education
market through its direct sales force, select third-party resellers and its online and retail stores.
The Company also sells its hardware and software products to enterprise and government customers in each of its geographic
segments. The Company’s products are deployed in these markets because of their performance, productivity, ease of use
and seamless integration into information technology environments. The Company’s products are compatible with thousands
of third-party business applications and services, and its tools enable the development and secure deployment of custom
applications as well as remote device administration. In July 2014, the Company announced a global partnership with IBM to
offer MobileFirst for iOS, a new class of industry-specific mobile solutions; AppleCare for Enterprise, a new service and support
product tailored to the needs of enterprise customers; and Device Supply, Activate and Manage, a suite of value-added
reselling services for iPhone, iPad and Mac.
No single customer accounted for more than 10% of net sales in 2014, 2013 or 2012.
Apple Inc. | 2014 Form 10-K | 5