Apple Computer, Inc.
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General Company Info
Computers are still an important part of its mix, but these days music-related products are at the top of Apple's playlist. The company scored a runaway hit with its digital music players (iPod) and online music store (iTunes). Apple's desktop and laptop computers -- all of which feature its OS X operating system -- include its Mac mini, iMac, and MacBook for the consumer and education markets, and more powerful Mac Pro and MacBook Pro for high-end consumers and professionals involved in design and publishing. Other products include mobile phones (iPhone), servers (Xserve), wireless networking equipment (Airport), and publishing and multimedia software. Its FileMaker subsidiary provides database software.
Only co-founder, CEO, and Apple crusader Steve Jobs may have expected the level of success the company's music-related products have enjoyed. Since debuting the iPod in 2001, Apple has provided regular feature updates to the line, including touch-screen displays and wireless capabilities. In 2003 Apple announced the launch of an online music service called the iTunes Music Store that lets computer users purchase and download songs for 99 cents each. Apple has since expanded the offerings to include music videos, audiobooks, television shows, and other content. The store's catalog, which has helped spur sales of Apple's popular iPod digital music and video players, includes songs from the five largest record labels, as well as television and movie content from a number of networks. The company has also launched international versions of its iTunes Music Store. In 2006 the company launched an online movie service, and previewed a device called iTV for watching downloaded content on televisions. Apple announced availability of its television device, redubbed Apple TV, early the following year.
Early in 2007 the company finally unveiled a long-rumored Apple mobile phone -- the iPhone -- that combines features of a high-end handset with those of an iPod. AT&T was named the exclusive carrier for the phone in the US market.
Once the world's top PC maker, Apple has been relegated to niche status in a market dominated by "Wintel" machines (computers using Microsoft Windows software and Intel processors). Macintosh computers run Apple's own UNIX-based operating system. The uniqueness of Apple's computers is a double-edged sword for the company. The graphical interface and form factor of Macintosh computers reflect the aesthetic of Jobs, who has long championed the importance of visually attractive, user-friendly design. The features that distinguish Macs have allowed the company to maintain a loyal following willing to pay premium prices and overlook any interoperability issues with Windows (a factor that Apple largely addressed with its OS X operating system). However, Apple trails far behind top Window-based PC vendors such as Hewlett-Packard and Dell in terms of market share.
In addition to its proprietary operating system, a traditional differentiator for Apple had been its use of IBM's PowerPC processors (manufactured by IBM and Freescale). However, in 2005 Apple announced it would begin incorporating Intel chips into its PC lines. Apple debuted its first Intel-based computers early in 2006, and it completed the transition across its entire line later that year. The company also released software that allows its Intel-based computers to run Microsoft's XP operating system.
It is a component of the S&P500 and Nasdaq100.
Financial Information
Headquarters
Fiscal Year-End / September
2007 Sales (mil.) / $24,006.0
1-Year Sales Growth / 24.3%
2007 Net Income (mil.) / $3,496.0
1-Year Net Income Growth / 75.8%
2006 Employees / 17,787
1-Year Employee Growth / 5.7%
Operating Segments
2007 Sales by Operating Segment / $ mil. / % of totalAmericas / 11,596 / 48
Europe / 5,460 / 23
Retail / 4,115 / 17
Asia/Pacific & Filemaker / 1,753 / 7
Japan / 1,082 / 5
Total / 24,006 / 100
2007 Sales by Product Type / $ mil. / % of total
Music-related products
iPod / 8,305 / 35
iTunes Music Store & other / 2,496 / 10
Computers
Portable / 6,294 / 26
Desktop & server / 4,020 / 17
Peripherals & other hardware / 1,260 / 5
iPhone & related products & services / 123 / 1
Software, services & other / 1,508 / 6
Total / 24,006
In the news
Jan 09, 2008 - Apple a year ahead of the competition
According to Philip Elmer-DeWitt (Fortune), Gene Munster, an analyst with Piper Jaffray, believes that Apple is “effectively one year ahead of its competition.” Munster made the observation after touring the 2008 Consumer Electronics show and seeing reflected in the products there displayed unmistakable evidence of Apple’s achievements in hardware design, touchscreen devices, and ecosystem connectivity. Looking forward to “Apple’s Macworld announcements (1/15),” Munster expects Apple to set a similar “bar for CES ’09.”
January 7, 2008 - Andrea Jung Joins Apple’s Board of Directors
Apple® today announced that Andrea Jung, chairman and chief executive officer of Avon Products, was elected to Apple’s board of directors. Andrea also serves on the board of directors of the General Electric Company and is a member of the New York Presbyterian Hospital board of trustees and the Catalyst board of directors. “Andrea is a strong CEO and marketer and we look forward to benefiting from her insights and experience as a member of Apple’s board,” said Steve Jobs, Apple’s CEO. “Andrea will be our eighth board member, and I think she will add a new dimension to our already lively board discussions.”
Jan 02, 2008 - “iPhone tops big tech year”
“The biggest tech story of 2007 occurred shortly after the new year when Apple announced the iPhone at the MacWorld Expo in San Francisco,” writes Larry Magid (cbsnews.com) in his assessment of the tech innovations for 2007. And, Magid points out, Apple “also came out with a new operating system last year called Leopard.” In fact, “unlike the lukewarm response to Vista, Mac users seem to be generally impressed by Leopard.”
Oct 16, 2006 (Reuters) - The growth of iPod sales is slowing but Apple Computer Inc. may surprise investors with strength from its original business -- computers -- when it posts quarterly results on Wednesday. With more than 75 percent of the U.S. market for digital music players, there's limited room for growth in iPod market share, but there is plenty of room to boost Apple's original business, selling the Macintosh computers known for their industrial design and included package of media software.
Oct. 13, 2006 /PRNewswire-FirstCall/ - Apple(R) today announced the iPod(R) nano RED Special Edition. RED was created by U2 lead singer, Bono and Bobby Shriver to engage business in the fight against AIDS in Africa by getting the world's most iconic companies to make uniquely branded products. Apple will contribute $10 from the sale of each iPod nano RED to the Global Fund to help fight HIV/AIDS in Africa.
Oct 5, 2006 (Dow Jones) - As Starbucks Corp. expands its entertainment options, it announced Thursday that it is establishing its own Starbucks Hear Music store on Apple Inc.'s iTunes store. Ken Lombard, Starbucks president of entertainment, said the store will include selections chosen by Starbucks. "This is the first time Apple has allowed editorial guidance to appear within its iTunes Store," Lombard said. Starbucks executives declined to say how much revenue the company expects from the deal with Apple, but they did say that they did not pay a fee to get on the iTunes site. They added that Starbucks' approach with the new iTunes product is to view it as a profit center.
Top Competitors
Dell - world's #1 direct-sale computer vendor
Hewlett-Packard - provides a full range of high-tech equipment and software
Microsoft - world's #1 software company
Sources: Company website, Hoovers.com, Yahoo! Finance, CNNMoney.com and Morningstar.com