Apple 2015 Annual Report Download - page 6

Other Products
Accessories
The Company sells a variety of Apple-branded and third-party Mac-compatible and iOS-compatible accessories, including Apple TV,
Apple Watch, headphones, displays, storage devices, Beats products, and various other connectivity and computing products and
supplies.
Apple TV
Apple TV connects to consumers’ TVs and enables them to access digital content directly for streaming high definition video, playing
music and games, and viewing photos. Content from Apple Music and other media services are also available on Apple TV. Apple TV
allows streaming digital content from Mac and Windows personal computers through Home Share and through AirPlay®from compatible
Mac and iOS devices. In September 2015, the Company announced the new Apple TV running on the Company’s tvOS operating system
and based on apps built for the television. Additionally, the new Apple TV remote features Siri, allowing users to search and access
content with their voice. The new Apple TV is expected to be available at the end of October 2015.
Apple Watch
Apple Watch is a personal electronic device that combines the watchOS user interface and technologies created specifically for a smaller
device, including the Digital Crown, a unique navigation tool that allows users to seamlessly scroll, zoom and navigate, and Force Touch, a
technology that senses the difference between a tap and a press and allows users to access controls within apps. Apple Watch enables
users to communicate in new ways from their wrist, track their health and fitness through activity and workout apps, and includes Siri and
Apple Pay.
iPod
iPod is the Company’s line of portable digital music and media players, which includes iPod touch, iPod nano®and iPod shuffle®. All
iPods work with iTunes to purchase and synchronize content. iPod touch, based on the Company’s iOS operating system, is a flash-
memory-based iPod that works with the iTunes Store, App Store and iBooks Store for purchasing and playing digital content and apps.
Developer Programs
The Company’s developer programs support app developers with building, testing and distributing apps for iOS, Mac, Apple Watch and
the new Apple TV. Developer program membership provides access to beta software, the ability to integrate advanced app capabilities
(e.g., iCloud, Game Center and Apple Pay), distribution on the App Store, access to App Analytics, and code-level technical support.
Developer programs also exist for businesses creating apps for internal use (the Apple Developer Enterprise Program) and developers
creating accessories for Apple devices (the MFi Program). All developers, even those who are not developer program members, can sign
in with their Apple ID to post on the Apple Developer Forums and use Xcode®, the Company’s integrated development environment for
creating apps for Apple platforms. Xcode includes project management tools; analysis tools to collect, display and compare app
performance data; simulation tools to locally run, test and debug apps; and tools to simplify the design and development of user
interfaces. All developers also have access to extensive technical documentation and sample code.
Markets and Distribution
The Company’s customers are primarily in the consumer, small and mid-sized business, 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 small and mid-
sized businesses 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 2015, the Company’s net
sales through its direct and indirect distribution channels accounted for 26% and 74%, 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.
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