Apple Inc.From Wikipedia, the free encyclopediaThis article is about the consumer electronics company. For other companies named "Apple", see Apple (disambiguation).

Apple Inc.

TypePublic

Traded asNASDAQ:AAPLNYSE:AAPLNASDAQ-100 ComponentS&P 500 Component

IndustryComputer hardwareComputer softwareConsumer electronicsDigital distribution

FoundedApril 1, 1976

Founder(s)Steve JobsSteve WozniakRonald Wayne[1]

HeadquartersApple Campus1 Infinite LoopCupertino, California, U.S.

Number of locations317retail stores (as of October 2010)[2]

Area servedWorldwide

Key peopleSteve Jobs(Chairman and CEO)Tim Cook(COO and Acting CEO)

ProductsProducts list[show]

ServicesServices list[show]

RevenueUS$ 65.23 billion (FY 2010)[2]

Operating incomeUS$ 18.39 billion (FY 2010)[2]

ProfitUS$ 14.01 billion (FY 2010)[2]

Total assetsUS$ 75.18 billion (FY 2010)[2]

Total equityUS$ 47.79 billion (FY 2010)[2]

Employees49,400 (2010)[2]

SubsidiariesBraeburn CapitalFileMaker Inc.

Websitewww.apple.com

Apple Inc. (NASDAQ:AAPL; NYSE:AAPL; previously Apple Computer, Inc.) is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software; Aperture, a professional photography package; Final Cut Studio, a suite of professional audio and film-industry software products; Logic Studio, a suite of music production tools; the Safari internet browser; and iOS, a mobile operating system. As of August 2010, the company operates 301retail stores[3] in ten countries,[4] and an online store where hardware and software products are sold.[5] As of May 2011, Apple is one of the largest companies in the world and the most valuable technology company in the world, having surpassed Microsoft.[6]Established on April1,1976 in Cupertino, California, and incorporated January3,1977,[7] the company was previously named Apple Computer, Inc., for its first 30years, but removed the word "Computer" on January9,2007,[8] to reflect the company's ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers.[9] As of September 2010, Apple had 46,600full time employees and 2,800temporary full time employees worldwide[2] and had worldwide annual sales of $65.23billion.[2]For reasons as various as its philosophy of comprehensive aesthetic design to its distinctive advertising campaigns, Apple has established a unique reputation in the consumer electronics industry. This includes a customer base that is devoted to the company and its brand, particularly in the United States.[10] Fortune magazine named Apple the most admired company in the United States in 2008, and in the world in 2008, 2009, and 2010.[11][12][13] The company has also received widespread criticism for its contractors' labor, environmental, and business practices.[14][15]Contents[hide] 1 History 1.1 19761980: The early years 1.2 19811985: Lisa and Macintosh 1.3 19861993: Rise and fall 1.4 19941997: Attempts at reinvention 1.5 19982005: Return to profitability 1.6 20052007: The Intel transition 1.7 2007present: Post-PC era 2 Products 2.1 Mac and accessories 2.2 iPad 2.3 iPod 2.4 iPhone 2.5 Apple TV 2.6 Software 3 Timeline of Apple products 4 Culture 4.1 Corporate 4.2 Users 5 Corporate affairs 5.1 Headquarters 5.2 Advertising 5.2.1 Logos 5.2.2 Slogans 5.2.3 Commercials 6 Environmental record 7 Labor practices 8 See also 9 Notes 10 References 11 Further reading 12 External links

HistoryMain article: History of Apple Inc.19761980: The early years

The Apple I, Apple's first product, was sold as an assembled circuit board and lacked basic features such as a keyboard, monitor, and case. The owner of this unit added a keyboard and a wooden case.Apple was established on April1,1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne,[1] to sell the Apple I personal computer kit. They were hand-built by Wozniak[16][17] and first shown to the public at the Homebrew Computer Club.[18] The Apple I was sold as a motherboard (with CPU, RAM, and basic textual-video chips)less than what is today considered a complete personal computer.[19] The Apple I went on sale in July 1976 and was market-priced at $666.66 ($2,572 in 2011 dollars, adjusted for inflation.)[20][21][22][23][24][25]Apple was incorporated January 3, 1977[7] without Wayne, who sold his share of the company back to Jobs and Wozniak for $800. Multi-millionaire Mike Markkula provided essential business expertise and funding of $250,000 during the incorporation of Apple.[26][27]The Apple II was introduced on April 16, 1977 at the first West Coast Computer Faire. It differed from its major rivals, the TRS-80 and Commodore PET, because it came with color graphics and an open architecture. While early models used ordinary cassette tapes as storage devices, they were superseded by the introduction of a 51/4inch floppy disk drive and interface, the Disk II.[28]The Apple II was chosen to be the desktop platform for the first "killer app" of the business worldthe VisiCalc spreadsheet program.[29] VisiCalc created a business market for the Apple II, and gave home users an additional reason to buy an Apple IIcompatibility with the office.[29] According to Brian Bagnall, Apple exaggerated its sales figures and was a distant third place to Commodore and Tandy until VisiCalc came along.[30][31]By the end of the 1970s, Apple had a staff of computer designers and a production line. The company introduced the ill-fated Apple III in May 1980 in an attempt to compete with IBM and Microsoft in the business and corporate computing market.[32]Jobs and several Apple employees including Jef Raskin visited Xerox PARC in December 1979 to see the Xerox Alto. Xerox granted Apple engineers three days of access to the PARC facilities in return for the option to buy 100,000 shares (800,000 split-adjusted shares) of Apple at the pre-IPO price of $10 a share.[33] Jobs was immediately convinced that all future computers would use a graphical user interface (GUI), and development of a GUI began for the Apple Lisa.[34]When Apple went public, it generated more capital than any IPO since Ford Motor Company in 1956 and instantly created more millionaires (about 300) than any company in history.19811985: Lisa and Macintosh

The Model from Apple's "1984" ad, set in a dystopian future modeled after the George Orwell novel Nineteen Eighty-Four, set the tone for the introduction of the Macintosh.Steve Jobs began working on the Apple Lisa in 1978 but in 1982 he was pushed from the Lisa team due to infighting, and took over Jef Raskin's low-cost-computer project, the Macintosh. A turf war broke out between Lisa's "corporate shirts" and Jobs' "pirates" over which product would ship first and save Apple. Lisa won the race in 1983 and became the first personal computer sold to the public with a GUI, but was a commercial failure due to its high price tag and limited software titles.[35]

The first Macintosh, released in 1984In 1984, Apple next launched the Macintosh. Its debut was announced by the now famous $1.5 million television commercial "1984". It was directed by Ridley Scott, aired during the third quarter of Super Bowl XVIII on January 22, 1984,[36] and is now considered a watershed event for Apple's success[37] and a "masterpiece".[38][39]The Macintosh initially sold well, but follow-up sales were not strong[40] due to its high price and limited range of software titles. The machine's fortunes changed with the introduction of the LaserWriter, the first PostScript laser printer to be offered at a reasonable price, and PageMaker, an early desktop publishing package. The Mac was particularly powerful in this market due to its advanced graphics capabilities, which had necessarily been built in to create the intuitive Macintosh GUI. It has been suggested that the combination of these three products was responsible for the creation of the desktop publishing market.[41]In 1985 a power struggle developed between Jobs and CEO John Sculley, who had been hired two years earlier.[42] The Apple board of directors instructed Sculley to "contain" Jobs and limit his ability to launch expensive forays into untested products. Rather than submit to Sculley's direction, Jobs attempted to oust him from his leadership role at Apple. Sculley found out that Jobs had been attempting to organize a putsch and called a board meeting at which Apple's board of directors sided with Sculley and removed Jobs from his managerial duties.[40] Jobs resigned from Apple and founded NeXT Inc. the same year.[43]19861993: Rise and fallSee also: Timeline of Apple II familyand Timeline of Macintosh models

The Macintosh Portable was Apple's first "portable" Macintosh computer, released in 1989.Having learned several painful lessons after introducing the bulky Macintosh Portable in 1989, Apple introduced the PowerBook in 1991, which established the modern form factor and ergonomic layout of the laptop computer.[44] The Macintosh Portable was designed to be just as powerful as a desktop Macintosh, but weighed 17pounds with a 12-hour battery life. The same year, Apple introduced System 7, a major upgrade to the operating system, which added color to the interface and introduced new networking capabilities. It remained the architectural basis for Mac OS until 2001.The success of the PowerBook and other products brought increasing revenue.[42] For some time, it appeared that Apple could do no wrong, introducing fresh new products and generating increasing profits in the process. The magazine MacAddict named the period between 1989 and 1991 as the "first golden age" of the Macintosh.Following the success of the Macintosh LC, Apple introduced the Centris line, a low-end Quadra offering, and the ill-fated Performa line that was sold in several confusing configurations and software bundles to avoid competing with the various consumer outlets such as Sears, Price Club, and Wal-Mart, the primary dealers for these models. The result was disastrous for Apple as consumers did not understand the difference between models.[45]During this time Apple experimented with a number of other failed consumer targeted products including digital cameras, portable CD audio players, speakers, video consoles, and TV appliances. Enormous resources were also invested in the problem-plagued Newton division based on John Sculley's unrealistic market forecasts.[citation needed] Ultimately, all of this proved too-little-too-late for Apple as their market share and stock prices continued to slide.[citation needed]Apple saw the Apple II series as too expensive to produce, while taking away sales from the low end Macintosh.[46] In 1990, Apple released the Macintosh LC with a single expansion slot for the Apple IIe Card to migrate Apple II users to the Macintosh platform.[46] Apple stopped selling the Apple IIe in 1993.Microsoft continued to gain market share with Windows, focusing on delivering software to cheap commodity personal computers while Apple was delivering a richly engineered, but expensive, experience.[47] Apple relied on high profit margins and never developed a clear response. Instead they sued Microsoft for using a graphical user interface similar to the Apple Lisa in Apple Computer, Inc. v. Microsoft Corporation.[48] The lawsuit dragged on for years before it was finally dismissed. At the same time, a series of major product flops and missed deadlines sullied Apple's reputation, and Sculley was replaced by Michael Spindler.[49]19941997: Attempts at reinvention

The Newton was Apple's first foray into the PDA markets, as well as one of the first in the industry. Despite being a financial flop at the time of its release, it helped pave the way for the Palm Pilot and Apple's own iPhone and iPad in the future.By the early 1990s, Apple was developing alternative platforms to the Macintosh, such as the A/UX. Apple had also begun to experiment in providing a Mac-only online portal which they called eWorld, developed in collaboration with America Online and designed as a Mac-friendly alternative to other online services such as CompuServe. The Macintosh platform was itself becoming outdated because it was not built for multitasking, and several important software routines were programmed directly into the hardware. In addition, Apple was facing competition from OS/2 and UNIX vendors like Sun Microsystems. The Macintosh would need to be replaced by a new platform, or reworked to run on more powerful hardware.[50]In 1994, Apple allied with IBM and Motorola in the AIM alliance. The goal was to create a new computing platform (the PowerPC Reference Platform), which would use IBM and Motorola hardware coupled with Apple's software. The AIM alliance hoped that PReP's performance and Apple's software would leave the PC far behind, thus countering Microsoft. The same year, Apple introduced the Power Macintosh, the first of many Apple computers to use IBM's PowerPC processor.[51]In 1996, Michael Spindler was replaced by Gil Amelio as CEO. Gil Amelio made many changes at Apple, including massive layoffs.[52] After multiple failed attempts to improve Mac OS, first with the Taligent project, then later with Copland and Gershwin, Amelio chose to purchase NeXT and its NeXTSTEP operating system, bringing Steve Jobs back to Apple as an advisor.[53] On July 9, 1997, Gil Amelio was ousted by the board of directors after overseeing a three-year record-low stock price and crippling financial losses. Jobs became the interim CEO and began restructuring the company's product line.At the 1997 Macworld Expo, Steve Jobs announced that Apple would join Microsoft to release new versions of Microsoft Office for the Macintosh, and that Microsoft made a $150 million investment in non-voting Apple stock.[54]On November 10, 1997, Apple introduced the Apple Store, tied to a new build-to-order manufacturing strategy.[55][56]19982005: Return to profitabilityOn August 15, 1998, Apple introduced a new all-in-one computer reminiscent of the Macintosh 128K: the iMac. The iMac design team was led by Jonathan Ive, who would later design the iPod and the iPhone.[57][58] The iMac featured modern technology and a unique design, and sold almost 800,000 units in its first five months.[59]Through this period, Apple purchased several companies to create a portfolio of professional and consumer-oriented digital production software. In 1998, Apple announced the purchase of Macromedia's Final Cut software, signaling its expansion into the digital video editing market.[60] The following year, Apple released two video editing products: iMovie for consumers and, for professionals, Final Cut Pro, which has gone on to be a significant video-editing program, with 800,000 registered users in early 2007.[61] In 2002 Apple purchased Nothing Real for their advanced digital compositing application Shake,[62] as well as Emagic for their music productivity application Logic, which led to the development of their consumer-level GarageBand application.[63][64] iPhoto's release the same year completed the iLife suite.[65]

Apple retail stores allow potential customers to use floor models without making a purchase.Mac OS X, based on NeXT's OPENSTEP and BSD Unix was released on March 24, 2001, after several years of development. Aimed at consumers and professionals alike, Mac OS X aimed to combine the stability, reliability and security of Unix with the ease of use afforded by an overhauled user interface. To aid users in migrating from Mac OS 9, the new operating system allowed the use of OS 9 applications through Mac OS X's Classic environment.[66]On May 19, 2001, Apple opened the first official Apple Retail Stores in Virginia and California.[67] later on July 9 they bought Spruce Technologies, a DVD authoring company. On October 23 of the same year, Apple announced the iPod portable digital audio player, and started selling it on November 10. The product was phenomenally successful over 100 million units were sold within six years.[68][69] In 2003, Apple's iTunes Store was introduced, offering online music downloads for $0.99 a song and integration with the iPod. The service quickly became the market leader in online music services, with over 5 billion downloads by June 19, 2008.[70]Since 2001 Apple's design team has progressively abandoned the use of translucent colored plastics first used in the iMac G3. This began with the titanium PowerBook and was followed by the white polycarbonate iBook and the flat-panel iMac.[71][72]20052007: The Intel transitionMain article: AppleIntel transition

The MacBook Pro (15.4" widescreen) was Apple's first laptop with an Intel microprocessor. It was announced in January 2006 and is aimed at the professional market.At the Worldwide Developers Conference keynote address on June 6, 2005, Steve Jobs announced that Apple would begin producing Intel-based Mac computers in 2006.[73] On January 10, 2006, the new MacBook Pro and iMac became the first Apple computers to use Intel's Core Duo CPU. By August 7, 2006 Apple had transitioned the entire Mac product line to Intel chips, over one year sooner than announced.[73] The Power Mac, iBook, and PowerBook brands were retired during the transition; the Mac Pro, MacBook, and MacBook Pro became their respective successors.[74][75] On April 29, 2009, The Wall Street Journal reported that Apple was building its own team of engineers to design microchips.[76]Apple also introduced Boot Camp to help users install Windows XP or Windows Vista on their Intel Macs alongside Mac OS X.[77]Apple's success during this period was evident in its stock price. Between early 2003 and 2006, the price of Apple's stock increased more than tenfold, from around $6 per share (split-adjusted) to over $80. In January 2006, Apple's market cap surpassed that of Dell.[78] Nine years prior, Dell's CEO Michael Dell said that if he ran Apple he would "shut it down and give the money back to the shareholders."[79]Although Apple's market share in computers has grown, it remains far behind competitors using Microsoft Windows, with only about 8% of desktops and laptops in the U.S.[80]2007present: Post-PC eraDelivering his keynote speech at the Macworld Expo on January 9, 2007, Jobs announced that Apple Computer, Inc. would from that point on be known as Apple Inc., because computers were no longer the main focus of the company, which had shifted its emphasis to mobile electronic devices. The event also saw the announcement of the iPhone and the Apple TV.[81] The following day, Apple shares hit $97.80, an all-time high at that point. In May, Apple's share price passed the $100 mark.[82]In an article posted on Apple's website on February 6, 2007, Steve Jobs wrote that Apple would be willing to sell music on the iTunes Store without DRM (which would allow tracks to be played on third-party players) if record labels would agree to drop the technology.[83] On April 2, 2007, Apple and EMI jointly announced the removal of DRM technology from EMI's catalog in the iTunes Store, effective in May.[84] Other record labels followed later that year.In July of the following year, Apple launched the App Store to sell third-party applications for the iPhone and iPod Touch.[85] Within a month, the store sold 60 million applications and brought in $1 million daily on average, with Jobs speculating that the App Store could become a billion-dollar business for Apple.[86] Three months later, it was announced that Apple had become the third-largest mobile handset supplier in the world due to the popularity of the iPhone.[87]On December 16, 2008, Apple announced that after over 20 years of attending Macworld, 2009 would be the last year Apple would be attending the Macworld Expo, and that Phil Schiller would deliver the 2009 keynote in lieu of the expected Jobs.[88] Almost exactly one month later, on January 14, 2009, an internal Apple memo from Jobs announced that he would be taking a six-month leave of absence, until the end of June 2009, to allow him to better focus on his health and to allow the company to better focus on its products without having the rampant media speculating about his health.[89] Despite Jobs' absence, Apple recorded its best non-holiday quarter (Q1 FY 2009) during the recession with a revenue of $8.16 billion and a profit of $1.21 billion.[90]Wikinews has related news: Apple unveils iPhone 4, iOS 4 at Worldwide Developers Conference 2010 Apple to give free cases, refunds to iPhone 4 owners Apple unveils new iPods, Apple TV; updates iOS, iTunes Apple unveils new MacBook Air laptops, iLife '11 software suite

After years of speculation and multiple rumored "leaks" Apple announced a large screen, tablet-like media device known as the iPad on January 27, 2010. The iPad runs the same touch based operating system that the iPhone uses and many of the same iPhone apps are compatible with the iPad. This gave the iPad a large app catalog on launch even with very little development time before the release. Later that year on April 3, 2010, the iPad was launched in the US and sold more than 300,000 units on that day and reaching 500,000 by the end of the first week.[91] In May of the same year, Apple's market cap exceeded that of competitor Microsoft for the first time since 1989.[92]Apple released the fourth generation iPhone, which introduced video calling, multitasking, and a new uninsulated stainless steel design, which acts as the phone's antenna. Because of this antenna implementation, some iPhone 4 users reported a reduction in signal strength when the phone is held in specific ways. After a large amount of media coverage including mainstream news organizations, Apple held a press conference where they offered buyers a free rubber 'bumper' case, which had been proven to eliminate the signal reduction issue. Later that year Apple again refreshed its iPod line of MP3 players which itroduced a multi-touch iPod Nano, iPod Touch with FaceTime, and iPod Shuffle with buttons which brought back the buttons of earlier generations.[93][94][95]In October 2010, Apple shares hit an all-time high, eclipsing $300.[96] Additionally, on October 20, Apple updated their MacBook Air laptop, iLife suite of applications, and unveiled Mac OS X Lion, the latest installment in their Mac OS X operating system.[97] On January 6, 2011, the company opened their Mac App Store, a digital software distribution platform, similar to the existing iOS App Store.[98] Apple was featured in the documentary Something Ventured which premiered in 2011.On January 17, 2011, an internal Apple memo from Jobs announced that he will once again take a medical leave of absence, for an indefinite period, to allow him to focus on his health. Chief operating officer Timothy D. Cook will take up Jobs' day-to-day operations at Apple, although Jobs will still remain "involved in major strategic decisions for the company."[99]After Apple Inc. surpassed Microsoft in market capitalization in 2010, Apple Inc. has also become the most valuable consumer-facing brand in the world with a 246 percent increase to $19.1 billion.[100]In June of 2011, Apple unveiled its new online storage and syncing service for music, photos, files and software -- iCloud. [101]ProductsSee also: Timeline of Apple productsand List of products discontinued by Apple Inc.Mac and accessoriesSee also: Timeline of Macintosh models, List of Macintosh models grouped by CPU type,and List of Macintosh models by case type

The Mac mini Mac mini, consumer sub-desktop computer and server introduced in 2005 iMac, consumer all-in-one desktop computer introduced in 1998 Mac Pro, workstation-class desktop computer introduced in 2006, replacing the Power Macintosh MacBook, consumer notebook introduced in 2006, replacing the iBook MacBook Pro, professional notebook introduced in 2006, replacing the PowerBook MacBook Air, ultra-thin, ultra-portable notebook introduced in 2008Apple also sells a variety of computer accessories for Mac computers including the AirPort wireless networking products, Time Capsule, Cinema Display, Magic Mouse, Magic Trackpad, Wireless Keyboard, and the Apple Battery Charger.iPadMain article: iPadOn January 27, 2010, Apple introduced their much-anticipated media tablet, the iPad running a modified version of iOS. It offers multi-touch interaction with multimedia formats including newspapers, magazines, ebooks, textbooks, photos, movies, TV shows videos, music, word processing documents, spreadsheets, video games, and most existing iPhone apps.[102] It also includes a mobile version of Safari for internet browsing, as well as access to the App Store, iTunes Library, iBooks Store, contacts, and notepad. Content is downloadable via Wi-Fi and optional 3G service or synced through the user's computer.[103] AT&T is currently the sole US provider of 3G wireless access for the iPad.[104]On March 2, 2011, Apple introduced an updated iPad model which had a faster processor and two cameras on the front and back respectively. The iPad 2 also added support for optional 3G service provided by Verizon in addition to the existing offering by AT&T.[105] However, the availability of the iPad 2 has been limited as a result of the devastating tsunami and ensuing earthquake in Japan in March 2011.[106]iPodMain article: iPod

The current iPod family, featuring the iPod Shuffle, iPod Nano, iPod Classic, and iPod TouchOn October 23, 2001, Apple introduced the iPod digital music player. It has evolved to include various models targeting the wants of different users. The iPod is the market leader in portable music players by a significant margin, with more than 220 million units shipped as of September 2009.[107] Apple has partnered with Nike to offer the Nike+iPod Sports Kit enabling runners to synchronize and monitor their runs with iTunes and the Nike+ website. Apple currently sells four variants of the iPod. iPod Classic (previously named iPod from 2001 to 2007), portable media player first introduced in 2001, currently available in a 160GB model. iPod Nano, portable media player first introduced in 2005, currently available in 8 and 16GB models. The newest generation has a FM radio, a pedometer, and a new multi-touch interface that replaced the traditional iPod click wheel. iPod Shuffle, digital audio player first introduced in 2005, currently available in 2 and 4GB models. iPod Touch, portable media player that runs iOS, first introduced in September 2007 after the iPhone went on sale. Currently available in 8, 32, and 64GB models. The latest generation features the Apple A4 processor, a Retina Display, and dual cameras on the front and back. The back camera allows video recording at 720p.iPhoneMain article: iPhoneAt the Macworld Conference & Expo in January 2007, Steve Jobs revealed the long anticipated[108] iPhone, a convergence of an Internet-enabled smartphone and iPod.[109] The original iPhone combined a 2.5G quad band GSM and EDGE cellular phone with features found in hand held devices, running scaled-down versions of Apple's Mac OS X (dubbed iOS, formerly iPhone OS), with various Mac OS X applications such as Safari and Mail. It also includes web-based and Dashboard apps such as Google Maps and Weather. The iPhone features a 3.5-inch (89mm) touch screen display, 4, 8, or 16GB of memory, Bluetooth, and Wi-Fi (both "b" and "g").[109] The iPhone first became available on June 29, 2007 for $499 (4GB) and $599 (8GB) with an AT&T contract.[110] On February 5, 2008, Apple updated the original iPhone to have 16GB of memory, in addition to the 8GB and 4GB models.[111] On June 9, 2008, at WWDC 2008, Steve Jobs announced that the iPhone 3G would be available on July 11, 2008.[112] This version added support for 3G networking, assisted-GPS navigation, and a price cut to $199 for the 8GB version, and $299 for the 16GB version, which was available in both black and white. The new version was visually different from its predecessor in that it eliminated the flat silver back, and large antenna square for a curved glossy black or white back. Following complaints from many people, the headphone jack was changed from a recessed jack to a flush jack to be compatible with more styles of headphones. The software capabilities changed as well, with the release of the new iPhone came the release of Apple's App Store; the store provided applications for download that were compatible with the iPhone. On April 24, 2009, the App Store surpassed one billion downloads.[113] On June 8, 2009, at Apple's annual worldwide developers conference, the iPhone 3GS was announced, providing an incremental update to the device including faster internal components, support for faster 3G speeds, video recording capability, and voice control. On June 7, 2010, at WWDC 2010, the iPhone 4 was announced, which Apple says is its "'biggest leap we've taken" since the original iPhone.[114] The phone includes an all-new design, 960x640 display, Apple's A4 processor used in the iPad, a gyroscope for enhanced gaming, 5MP camera with LED flash, front-facing VGA camera and FaceTime video calling. Shortly after the release of the iPhone 4, it was realized by consumers that the new iPhone had reception issues. This is due to the stainless steel band around the edge of the device, which also serves as the phones cellular signal and Wi-Fi antenna. The current fix for this issue was a "Bumper Case" for the phone distributed for free to all iPhone 4 owners for a few months. The music of Mihalis Safras was used in one of the iPhone marketing campaigns.[115]Apple TVMain article: Apple TV

The Apple TV, in its most recent revisionAt the 2007 Macworld conference, Jobs demonstrated the Apple TV, (previously known as the iTV),[116] a set-top video device intended to bridge the sale of content from iTunes with high-definition televisions. The device links up to a user's TV and syncs, either via Wi-Fi or a wired network, with one computer's iTunes library and streams from an additional four. The Apple TV originally incorporated a 40GB hard drive for storage, includes outputs for HDMI and component video, and plays video at a maximum resolution of 720p.[117] On May 31, 2007 a 160 GB drive was released alongside the existing 40GB model[118] and on January 15, 2008 a software update was released, which allowed media to be purchased directly from the Apple TV.[119] In September 2009, Apple discontinued the original 40 GB Apple TV and now continues to produce and sell the 160 GB Apple TV. On September 1, 2010, alongside the release of the new line of iPod devices for the year, Apple released a completely redesigned Apple TV. The new device is 1/4 the size, runs quieter, and replaces the need for a hard drive with media streaming from any iTunes library on the network along with 8 GB of flash memory to cache media downloaded. Apple with the Apple TV has added another device to its portfolio that runs on its A4 processor along with the iPad and the iPhone. The memory included in the device is the half of the iPhone 4 at 256 MB; the same as the iPad, iPhone 3GS, iPod touch 3G, and iPod touch 4G.[120] It has HDMI out as the only video out source. Features include access to the iTunes Store to rent movies and TV shows (purchasing has been discontinued), streaming from internet video sources, including YouTube and Netflix, and media streaming from an iTunes library. Apple also reduced the price of the device to $99.SoftwareSee also: List of Macintosh softwareApple develops its own operating system to run on Macs, Mac OS X, the latest version being Mac OS X v10.6 Snow Leopard. Apple also independently develops computer software titles for its Mac OS X operating system. Much of the software Apple develops is bundled with its computers. An example of this is the consumer-oriented iLife software package that bundles iDVD, iMovie, iPhoto, iTunes, GarageBand, and iWeb. For presentation, page layout and word processing, iWork is available, which includes Keynote, Pages, and Numbers. iTunes, QuickTime media player, Safari web browser, and Software Update are available as free downloads for both Mac OS X and Windows.Apple also offers a range of professional software titles. Their range of server software includes the operating system Mac OS X Server; Apple Remote Desktop, a remote systems management application; WebObjects, Java EE Web application server; and Xsan, a Storage Area Network file system. For the professional creative market, there is Aperture for professional RAW-format photo processing; Final Cut Studio, a video production suite; Logic, a comprehensive music toolkit and Shake, an advanced effects composition program.Apple also offers online services with MobileMe (formerly .Mac) that bundles personal web pages, email, Groups, iDisk, backup, iSync, and Learning Center online tutorials. MobileMe is a subscription-based internet suite that capitalizes on the ability to store personal data on an online server and thereby keep all web-connected devices in sync.[121] Announced at MacWorld Expo 2009, iWork.com allows iWork users to upload documents for sharing and collaboration.Timeline of Apple productsSee also: Timeline of Apple Inc. products, Timeline of Apple II family,and Timeline of Macintosh models

Products on this timeline indicate introduction dates only and not necessarily discontinued dates, as new products begin on a contiguous product line.CultureCorporateApple was one of several highly successful companies founded in the 1970s that bucked the traditional notions of what a corporate culture should look like in organizational hierarchy (flat versus tall, casual versus formal attire, etc.). Other highly successful firms with similar cultural aspects from the same period include Southwest Airlines and Microsoft. Originally, the company stood in opposition to staid competitors like IBM by default, thanks to the influence of its founders; Steve Jobs often walked around the office barefoot even after Apple was a Fortune 500 company. By the time of the "1984" TV ad, this trait had become a key way the company attempts to differentiate itself from its competitors.[122]As the company has grown and been led by a series of chief executives, each with his own idea of what Apple should be, some of its original character has arguably been lost, but Apple still has a reputation for fostering individuality and excellence that reliably draws talented people into its employ, especially after Jobs' return. To recognize the best of its employees, Apple created the Apple Fellows program, awarding individuals who made extraordinary technical or leadership contributions to personal computing while at the company. The Apple Fellowship has so far been awarded to a few individuals including Bill Atkinson,[123] Steve Capps,[124] Rod Holt,[123] Alan Kay,[125][126] Guy Kawasaki,[125][127] Al Alcorn,[128] Don Norman,[125] Rich Page,[123] and Steve Wozniak.[123]Numerous employees of Apple have cited that projects without Jobs' involvement often take longer than projects with his involvement.[129] Another presents the image of Jobs "wandering the hall with a flame thrower in hand, asking random people 'do you work on MobileMe?'".[130]Users

Apple aficionados wait in line around an Apple retail store in anticipation of a new product. This branch is located on Fifth Avenue in New York City, with a glass cube housing a cylindrical elevator and a spiral staircase that lead into the subterranean store.While this brand loyalty is considered unusual for any product, Apple appears not to have gone out of its way to create it. At one time, Apple evangelists were actively engaged by the company, but this was after the phenomenon was already firmly established. Apple evangelist Guy Kawasaki has called the brand fanaticism "something that was stumbled upon".[131] Apple has, however, supported the continuing existence of a network of Mac User Groups in most major and many minor centers of population where Mac computers are available.Mac users would meet at the European Apple Expo and the San Francisco Macworld Conference & Expo trade shows where Apple traditionally introduced new products each year to the industry and public until Apple pulled out of both events. While the conferences continue, Apple does not have official representation there. Mac developers, in turn, continue to gather at the annual Apple Worldwide Developers Conference.Apple Store openings can draw crowds of thousands, with some waiting in line as much as a day before the opening or flying in from other countries for the event.[132] The New York City Fifth Avenue "Cube" store had a line as long as half a mile; a few Mac fans took the opportunity of the setting to propose marriage.[133] The Ginza opening in Tokyo was estimated in the thousands with a line exceeding eight city blocks.[134]John Sculley told The Guardian newspaper in 1997: "People talk about technology, but Apple was a marketing company. It was the marketing company of the decade."[135]Research in 2002 by NetRatings indicate that the average Apple consumer was usually more affluent and more well-educated than PC consumers. The research indicated that this correlation could stem from the fact that on average Apple Inc. products are more expensive than PC products.[136][137] Almost ten years later the New York Times noted, "...the iPad 2 actually costs less than its comparably equipped Android rivals." [138]Corporate affairsSee also: List of mergers and acquisitions by Apple, Braeburn Capital,and FileMaker Inc.During the Mac's early history Apple generally refused to adopt prevailing industry standards for hardware, instead creating their own.[139] This trend was largely reversed in the late 1990s beginning with Apple's adoption of the PCI bus in the 7500/8500/9500 Power Macs. Apple has since adopted USB, AGP, HyperTransport, Wi-Fi, and other industry standards in its computers and was in some cases a leader in the adoption of standards such as USB.[140] FireWire is an Apple-originated standard that has seen widespread industry adoption after it was standardized as IEEE 1394.[141]Ever since the first Apple Store opened, Apple has sold third party accessories.[142] This allows, for instance, Nikon and Canon to sell their Mac-compatible digital cameras and camcorders inside the store. Adobe, one of Apple's oldest software partners,[143] also sells its Mac-compatible software, as does Microsoft, who sells Microsoft Office for the Mac. Books from John Wiley & Sons, who publishes the For Dummies series of instructional books, are a notable exception, however. The publisher's line of books were banned from Apple Stores in 2005 because Steve Jobs disagreed with their decision to publish an unauthorized Jobs biography, iCon.[144]HeadquartersMain article: Infinite Loop (street)

Company headquarters on Infinite Loop in Cupertino, CaliforniaApple Inc.'s world corporate headquarters are located in the middle of Silicon Valley, at 1 Infinite Loop, Cupertino, California. This Apple campus has six buildings that total 850,000 square feet (79,000 m2) and was built in 1993 by Sobrato Development Cos.[145]In 2006, Apple announced its intention to build a second campus on 50 acres (200,000 m2) assembled from various contiguous plots (east of N Wolfe Road between Pruneridge Avenue and Vallco Parkway). The new campus, also in Cupertino, will be about 1 mile (1.6km) east of the current campus.[146] The new campus building will be designed by Norman Foster[147]AdvertisingMain article: Apple Inc. advertisingFurther information: Think Different,Get a Mac,andApple Switch ad campaignSince the introduction of the Macintosh in 1984 with the 1984 Super Bowl commercial to the more modern 'Get a Mac' adverts, Apple has been recognized in the past for its efforts towards effective advertising and marketing for its products, though its advertising has been criticized for the claims of some more recent campaigns, particularly 2005 Power Mac ads[148][149][150] and iPhone ads in Britain.LogosSee also: U+F8FF or , seen as the Apple logo in some fonts.

The original logo with Isaac Newton under an apple tree

The rainbow "bitten" logo, used from late 1976 to 1998

The monochrome logo, used since 1998Apple's first logo, Wayne, depicts Sir Isaac Newton sitting under an apple tree.Almost immediately, though, this was replaced by Rob Janoff's "rainbow Apple", the now-familiar rainbow-colored silhouette of an apple with a bite taken out of it. Janoff presented Jobs with several different monochromatic themes for the "bitten" logo, and Jobs immediately took a liking to it. While Jobs liked the logo, he insisted it be in color to humanize the company.[151][152] The Apple logo was designed with a bite so that it wouldn't be recognized as another fruit. The colored stripes were conceived to make the logo more accessible, and to represent the fact the monitor could reproduce images in color.[153] The logo is often erroneously referred to as a tribute to Alan Turing, with the bite mark a reference to his method of suicide.[154][155] Both the designer of the logo and the company deny that there is any homage to Turing in the design of the logo.[153][156]In 1998, with the roll-out of the new iMac, Apple discontinued the rainbow theme and began to use monochromatic themes, nearly identical in shape to its previous rainbow incarnation, on various products, packaging and advertising. An Aqua-themed version of the monochrome logo was used from 20012003, and a Glass-themed version has been used since 2003.In the past, Apple Inc. has had trademark issues between themselves and Apple Corps ltd., a multimedia company started by the Beatles in 1967, involving their name and logo. This resulted in a series of lawsuits and tension between the two companies. These issues finally ended with their most recent law suit in 2007.SlogansMain article: List of Apple Inc. slogansApple's first slogan, "Byte into an Apple", was coined in the late 1970s.[157] From 19972002, Apple used the slogan Think Different in advertising campaigns. The slogan had a lasting impact on their image and revived their popularity with the media and customers, and the grammar caused a bit of discussion (i.e. "think" is a verb, which is modified by adverbs; therefore the adverb "differently" should be used, not the adjective "different"[158]). Although the slogan has been retired, it is still closely associated with Apple.[159] Apple also has slogans for specific product lines for example, "iThink, therefore iMac" was used in 1998 to promote the iMac,[160] and "Say hello to iPhone" has been used in iPhone advertisements.[161] "Hello" was also used to introduce the original Macintosh, Newton, iMac ("hello (again)"), and iPod.[162]CommercialsSee also: 1984 (advertisement), Lemmings (advertisement), iPod advertising,and music used by Apple Inc.Apple's product commercials gained fame for launching musicians into stardom as a result of their eye-popping graphics and catchy tunes. First, the company popularized Canadian singer Feist's "1234" song in its ad campaign. Later, Apple used the song "New Soul" by French-Israeli singer-songwriter Yael Nam to promote the MacBook Air.[163] The debut single shot to the top of the charts and sold hundreds of thousands of copies in a span of weeks.[163]Environmental recordGreenpeace, an environmental organization, has confronted Apple on various environmental issues, including promoting a global end-of-life take-back plan, non-recyclable hardware components, and toxins within the iPhone hardware.[164][165] Since 2003 they have campaigned against Apple regarding their chemical policies, in particular the inclusion of PVC and BFRs in their products, both of which have serious negative health effects.[164] At the 2007 Macworld Expo, Greenpeace presented a critique of Apple. Rick Hind, the legislative director of Greenpeace's toxics campaign, said, "(The company) is getting greener, but not green enough." Hind commented further, "The MacBook Air has less toxic PVC plastic and less toxic BFRs, but it could have zero and that would make Apple an eco-leader."[166] On May 2, 2007, Steve Jobs released a report announcing plans to eliminate PVC and BFRs by the end of 2008.[167][168] Apple has since eliminated PVC and BFRs across its product range.[169] It became the first laptop maker to remove PVC and BFRs.[170]In Greenpeace's Guide to Greener Electronics that scores electronics manufacturers on their policies regarding toxic chemicals, recycling and climate change, Apple ranked 9th out of 18 leading electronic makers in October 2010 with a score of 4.9/10 (securing the same score as in the previous version of the guide, however slipping 4 places down the ranking).[171] Greenpeace criticizes for example that Apple does not provide information about its management of chemicals and its supply chain communications. Apple also continues to score poorly in the Greenpeace's guide for the minimal information it provides about its future toxic chemical phase-out plans.[172] In the first edition, released in August 2006, Apple scored 2.7/10.[173]In 2010, Climate Counts, a nonprofit organization dedicated to directing consumers toward the greenest companies, gave Apple a score of 52 points out of a possible 100, which puts Apple in their top category "Striding".[174] This was an increase from May 2008, when Climate Counts only gave Apple 11 points out of a 100, which placed the company last among electronics companies, at which time Climate Counts also labeled Apple with a "stuck icon", adding that Apple at the time was "a choice to avoid for the climate conscious consumer".[15]The Environmental Protection Agency rates Apple highest amongst producers of notebook computers, and fairly well compared to producers of desktop computers and LCD displays.[175][176]In June 2007, Apple upgraded the MacBook Pro, replacing cold cathode fluorescent lamp (CCFL) backlit LCD displays with mercury-free LED backlit LCD displays and arsenic-free glass,[177] and has since done this for all notebooks. Apple has also phased out BFRs and PVCs from various internal components. Apple also offers detailed information about the emissions, materials, and electrical usage of each product. In June 2009, Apple's iPhone 3GS was free of PVC, arsenic, BFRs and had an efficient power adapter.[177]In October 2009, Apple upgraded the iMac and MacBook, replacing the cold cathode fluorescent lamp (CCFL) backlit LCD displays with mercury-free LED backlit LCD displays and arsenic-free glass.[181] This means all Apple computers have mercury free LED backlit displays, arsenic-free glass and are without PVC cables. All Apple computers also have EPEAT Gold status.[177]Labor practicesFurther information: Apple labor practicesIn 2006, the Mail on Sunday reported that sweatshop conditions existed in some factories in China, where the contract manufacturers, Foxconn and Inventec, operate the factories that produce the iPod.[182] The article stated that one complex of factories that assembles the iPod (among other items), for instance, had over 200,000 workers that lived and worked in the factory, with employees regularly working more than 60 hours per week. The article also reported that workers made around $100 per month and were required to live on the premises and pay for rent and food from the company, which generally amounted to a little over half of workers' earnings.[14][183][184][185]Immediately after the allegations, Apple launched an investigation and worked with their manufacturers to ensure that conditions were acceptable to Apple.[186] In 2007, Apple started yearly audits of all its suppliers regarding worker's rights, slowly raising standards and pruning suppliers that did not comply. Yearly progress reports have been published since 2008.[187] In 2010, workers in China planned to sue iPhone contractors over poisoning by a cleaner used to clean LCD screens. One worker claimed that he and his coworkers had not been informed of possible occupational illnesses.[188]

Annual report Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September25, 2010 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to Commission file number: 000-10030 APPLE INC. (Exact name of registrant as specified in its charter)

California 94-2404110

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

1 Infinite Loop Cupertino, California 95014

(Address of principal executive offices) (Zip Code)

Registrants telephone number, including area code: (408)996-1010 Securities registered pursuant to Section12(b)of the Act:

Common Stock, no par value The NASDAQ Global Select Market

(Title of class) (Name of exchange on which registered)

Securities registered pursuant to Section12(g)of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section13 or Section15(d) of the Act. Yes No Indicate by check mark whether the registrant (1)has filed all reports required to be filed by Section13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item405 of Regulation S-K (section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.

Largeacceleratedfiler Acceleratedfiler

Non-accelerated filer (Do not check if smaller reporting company) SmallerReportingCompany

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant, as of March27, 2010, was approximately $208,565,000,000 based upon the closing price reported for such date on the NASDAQ Global Select Market. For purposes of this disclosure, shares of common stock held by persons who hold more than 5% of the outstanding shares of common stock and shares held by executive officers and directors of the registrant have been excluded because such persons may be deemed to be affiliates. This determination of executive officer or affiliate status is not necessarily a conclusive determination for other purposes. 917,307,099 shares of Common Stock Issued and Outstanding as of October15, 2010 DOCUMENTS INCORPORATED BY REFERENCE (1) Portions of the registrants definitive Proxy Statement relating to its 2011 Annual Meeting of Shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Table of Contents The Business section and other parts of this Annual Report on Form 10-K (Form 10-K) contain forward-looking statements that involve risks and uncertainties. Many of the forward-looking statements are located in Managements Discussion and Analysis of Financial Condition and Results of Operations. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as anticipates, believes, estimates, expects, intends, plans, predicts, and similar terms. Forward-looking statements are not guarantees of future performance and the Companys 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 under Part I, Item1A of this Form 10-K, which are incorporated herein by reference. The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law. PART I Item1. Business

Company Background Apple Inc. and its wholly-owned subsidiaries (collectively Apple or the Company) designs, manufactures and markets a range of personal computers, mobile communication and media devices, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Companys products and services include Macintosh (Mac) computers, iPhone, iPad, iPod, Apple TV, Xserve, a portfolio of consumer and professional software applications, the Mac OS X and iOS operating systems, third-party digital content and applications through the iTunes Store, and a variety of accessory, service and support offerings. The Company sells its products worldwide through its retail stores, online stores, and direct sales force and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In addition, the Company sells a variety of third-party Mac, iPhone, iPad 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 consumer, small and mid-sized business (SMB), education, enterprise, government and creative markets. The Companys fiscal year is the 52 or 53-week period that ends on the last Saturday of September. Unless otherwise stated, all information presented in this Form 10-K is based on the Companys fiscal calendar. The Company is a California corporation founded in 1977. Business Strategy The Company is committed to bringing the best user experience to its customers through its innovative hardware, software, peripherals, services, and Internet offerings. The Companys 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 industrial design. The Company believes continual investment in research and development is critical to the development and enhancement of innovative products and technologies. In conjunction with its strategy, the Company continues to build and host a robust platform for the discovery and delivery of third-party digital content and applications through the iTunes Store. The iTunes Store includes the App Store and iBookstore, which allow customers to discover and download third-party applications and books through either a Mac or Windows-based computer or wirelessly through an iPhone, iPad or iPod touch. The Company also works to support a community for the development of third-party software and hardware products and digital content that complement the Companys offerings. Additionally, the Companys strategy includes expanding its distribution to effectively reach more customers and provide them with a high-quality sales and post-sales support experience. The Company is therefore uniquely positioned to offer superior and well-integrated digital lifestyle and productivity solutions. 1

Table of Contents Consumer and Small and Mid-Sized Business The Company believes a high-quality buying experience with knowledgeable salespersons who can convey the value of the Companys products and services greatly enhances its ability to attract and retain customers. The Company sells many of its products and resells certain third-party products in most of its major markets directly to consumers and businesses through its retail and online stores. 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 integration and support services, and product expertise. As of September25, 2010, the Company had opened a total of 317 retail stores, including 233 stores in the U.S. and 84 stores internationally. The Company has typically located its stores 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 control the customer buying experience and attract new customers. The stores are designed to simplify and enhance the presentation and marketing of the Companys products and related solutions. To that end, retail store configurations have evolved into various sizes to accommodate market-specific demands. The Company believes providing direct contact with its targeted customers is an effective way to demonstrate the advantages of its products over those of its competitors. The stores employ experienced and knowledgeable personnel who provide product advice, service and training. The stores offer a wide selection of third-party hardware, software, and various other accessories and peripherals that complement the Companys products. Education Throughout its history, the Company has focused on the use of technology in education and has been committed to delivering tools 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, especially when used to support collaboration, information access, and the expression and representation of student thoughts and ideas. The Company has designed a range of products, services and programs to address the needs of education customers, including individual laptop programs and education road shows. In addition, the Company supports mobile learning and real-time distribution and accessibility of education related materials through iTunes U, which allows students and teachers to share and distribute educational media directly through their computers and mobile communication and media devices. The Company sells its products to the education market through its direct sales force, select third-party resellers and its online and retail stores. Enterprise, Government and Creative The Company also sells its hardware and software products to customers in enterprise, government and creative markets in each of its geographic segments. These markets are also important to many third-party developers who provide Mac-compatible hardware and software solutions. Customers in these markets utilize the Companys products because of their high-powered computing performance and expansion capabilities, networking functionality, and seamless integration with complementary products. The Company designs its high-end hardware solutions to incorporate the power, expandability, compatibility and other features desired by these markets. Other In addition to consumer, SMB, education, enterprise, government and creative markets, the Company provides hardware and software products and solutions for customers in the information technology and scientific markets. Business Organization The Company manages its business primarily on a geographic basis. The Companys reportable operating segments consist of the Americas, Europe, Japan, Asia-Pacific and Retail. The Americas, Europe, Japan and 2

Table of Contents Asia-Pacific reportable segments do not include activities related to the Retail segment. The Americas segment includes both North and South America. The Europe segment includes European countries, as well as the Middle East and Africa. The Asia-Pacific segment includes Australia and Asia, but does not include Japan. The Retail segment operates Apple-owned retail stores in the U.S. and in international markets. Each reportable operating segment provides similar hardware and software products and similar services. Further information regarding the Companys operating segments may be found in Part II, Item7 of this Form 10-K under the subheading Segment Operating Performance, and in Part II, Item8 of this Form 10-K in Notes to Consolidated Financial Statements at Note 9, Segment Information and Geographic Data. Products The Company offers a range of personal computing products, mobile communication and media devices, and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions and various third-party hardware and software products. In addition, the Company offers its own software products, including Mac OS X, the Companys proprietary operating system software for the Macintosh (Mac); iOS, the Companys proprietary mobile operating system; server software and application software for consumer, education, and business customers. The Companys primary products are discussed below. Mac Hardware Products The Company offers a range of personal computing products including desktop and portable computers, Xserve servers, related devices and peripherals, and various third-party hardware products. The Companys Mac desktop and portable systems feature Intel microprocessors, the Companys Mac OS X Version 10.6 Snow Leopard (Mac OS X Snow Leopard) operating system and the iLife suite of software for creation and management of digital photography, music, movies, DVDs and websites. The Companys desktop computers include iMac , Mac Pro and Mac mini. The iMac desktop computer is an all-in-one design that incorporates a display, processor, graphics card, hard drive, optical drive, memory and other components inside a single enclosure. The Mac Pro desktop computer is targeted at business and professional customers and is designed to meet the performance, expansion, and networking needs of the most demanding Mac user. The Mac mini is a desktop computer in a compact enclosure. The Companys portable computers include MacBook , MacBook Pro and MacBook Air . MacBook is a portable computer designed for consumer and education users. MacBook Pro is a portable computer designed for professionals and consumers. MacBook Air is a high performance, ultra-slim notebook computer designed for professionals and consumers. iTunes iTunes digital music management software (iTunes) is an application for playing, downloading, and organizing digital audio and video files and is available for both Mac and Windows-based computers. iTunes 10 features Ping, a music-oriented social network, AirPlay wireless music playback, Genius Mixes, Home Sharing, and improved syncing functionality with the Companys mobile communication and media devices. iTunes is integrated with the iTunes Store , a service that allows customers to find, purchase, rent, and download third-party digital music, audio books, music videos, short films, television shows, movies, podcasts, games, and other applications. The iTunes Store currently serves customers in 23 countries. The iTunes Store includes the Companys App Store and iBookstore. The App Store allows customers to discover and download third-party applications, and the iBookstore features electronic books from major and independent publishers and provides customers a place to preview and buy books for their mobile communication and media devices. Customers can access the App Store through either a Mac or Windows-based computer or wirelessly through an iPhone , iPad or iPod touch . The iBookstore is accessed through the iBooks application on an iPhone, iPad or iPod touch. 3

Table of Contents iPhone iPhone combines a mobile phone, a widescreen iPod with touch controls, and an Internet communications device in a single handheld product. Based on the Companys Multi-Touch user interface, iPhone featuresdesktop-class email, web browsing, searching, and maps and is compatible with both Macs and Windows-based computers. iPhone automatically syncs content from users iTunes libraries, as well as contacts, bookmarks, and email accounts.iPhone allows customers to access the iTunes Store to download audio and video files, as well as a variety of other digital content and applications. In June 2010, the Company introduced the iPhone 4 featuring an all-new design, FaceTime video calling, a new high resolution Retina display, a 5 megapixel camera with LED flash and front facing camera, high definition video recording, Apples A4 processor and a 3-axis gyroscope. In addition to the Companys own iPhone accessories, third-party iPhone compatible products are available through the Companys online and retail stores and from third parties. The Company has signed multi-year agreements with various cellular network carriers authorizing them to distribute and provide cellular network services for iPhones. These agreements are generally not exclusive with a specific carrier, except in the U.S. iPad In January 2010, the Company introduced iPad, a multi-purpose mobile device for browsing the web, reading and sending email, viewing photos, watching videos, listening to music, playing games, reading e-books and more. iPad is based on the Companys Multi-Touch technology and allows customers to connect with their applications and content in a more interactive way. iPad allows customers to access the iTunes Store to download audio and video files, as well as a variety of other digital content and applications. In addition to the Companys own iPad accessories, third-party iPad compatible products are available through the Companys online and retail stores and from third parties. iPod The Companys iPod line of portable digital music and media players is comprised of iPod touch, iPod nano , iPod shuffle and iPod classic . All iPods work with iTunes. In addition to the Companys own iPod accessories, third-party iPod compatible products are available, either through the Companys online and retail stores or from third parties. The iPod touch is a flash-memory-based iPod with a widescreen display and a Multi-Touch user interface. The Companys latest iPod touch, introduced in September 2010, includes features such as a Retina display, FaceTime video calling, high definition video recording and Game Center. iPod touch allows customers to access the iTunes Store to download audio and video files, as well as a variety of other digital content and applications. The Companys latest iPod nano, introduced in September 2010, is a flash-memory-based iPod that has been redesigned to feature the Companys Multi-Touch interface allowing customers to navigate their music collection by tapping or swiping the display. The new iPod nano features a polished aluminum and glass enclosure with a built-in clip. iPod shuffle, which was updated in September 2010, is a flash-memory-based iPod that features a clickable control pad to control music playback and VoiceOver technology enabling customers to hear song titles, artists and playlist names. The iPod classic is a hard-drive based portable digital music and video player. Displays& Peripheral Products The Company manufactures the Apple Cinema High Definition Display and sells a variety of Apple-branded and third-party Mac-compatible peripheral products, including printers, storage devices, computer memory, digital video and still cameras, and various other computing products and supplies. 4

Table of Contents Apple TV Apple TV is a device that allows customers to rent and watch movies and television shows on their television. Content from Netflix, YouTube, Flickr and MobileMe, as well as music, photos and videos from a Mac or Windows-based computer can also be wirelessly streamed to a television through Apple TV. Software Products and Computer Technologies The Company offers a range of software products for consumer, SMB, education, enterprise, government, and creative customers, including the Companys proprietary Mac OS X and iOS operating system software; server software and related solutions; professional application software; and consumer, education, and business oriented application software. Operating System Software Mac OS X Mac OS X is built on an open-source UNIX-based foundation. Mac OS X Snow Leopard is the seventh major release of Mac OS X and became available in August 2009. Mac OS X Snow Leopard features upgraded speed and performance and includes a new version of QuickTime X, support for Microsoft Exchange Server 2007 and VoiceOver integration with the Multi-Touch trackpad. Mac OS X offers Stacks, a means of easily accessing files from the Dock; Finder that lets users quickly browse and share files between multiple Macs; Quick Look, a way to instantly see files without opening an application; Spaces , a feature used to create groups of applications and instantly switch between them; and Time Machine , a way to automatically back up all of the contents of a Mac. iOS iOS is the Companys mobile operating system that serves as the foundation for iPhone, iPad and iPod touch. In June 2010, the Company launched iOS 4, the latest version of the Companys mobile operating system. iOS 4 features Multitasking that allows customers to move between applications, Folders to organize and easily access applications, a unified Mail inbox, support for the iAd mobile advertising platform, and the iBooks reader and iBookstore. The iAd mobile advertising platform provides media rich advertisements which allows mobile device customers to engage with an ad without being removed from the applications they are currently using. iOS 4 became available for iPhone 3G, iPhone 3GS, iPhone 4, and second and third generation iPod touch in June 2010, and is expected to be available for iPad in November 2010. Certain features of the iOS 4 software will not function on certain earlier iPhone and iPod touch models. Application Software iLife iLife 11 is the latest version of the Companys consumer-oriented digital lifestyle application suite included with all Mac computers. iLife features iPhoto , iMovie , iDVD , GarageBand , and iWeb. iPhoto is the Companys consumer-oriented digital photo software application and iMovie is the Companys consumer-oriented digital video editing software application. iDVD is the Companys consumer-oriented software application that enables customers to turn iMovie files, QuickTime files, and digital pictures into interactive DVDs. GarageBand is the Companys consumer-oriented music creation software application that allows customers to play, record and create music. iWeb allows customers to create online photo albums, blogs and podcasts, and to customize websites using editing tools. iWork iWork 09 is the latest version of the Companys integrated productivity suite designed to help users create, present, and publish documents, presentations, and spreadsheets. iWork 09 includes updates to Pages 09 for 5

Table of Contents word processing and page layout, Keynote 09 for presentations, and Numbers 09 for spreadsheets. In January 2010, the Company also introduced a new version of iWork for iPad, a productivity suite including versions of Pages, Keynote and Numbers designed specifically for Multi-Touch. Other Application Software The Company also sells various other application software, including Final Cut Studio , Final Cut Express, Final Cut Server, Logic Studio , Logic Express 9, Logic Studio Pro, and its FileMaker Pro database software. Internet Software and Services The Company is focused on delivering seamless integration with and access to the Internet throughout the Companys products and services. The Companys Internet solutions adhere to many industry standards to provide an optimized user experience. Safari 5 is the latest version of the Companys web browser that is compatible with Macs and Windows-based computers. MobileMe is an annual subscription-based suite of Internet services that delivers email, contacts and calendars to and from native applications on iPhone, iPad, iPod touch, Macs, and Windows-based computers. Product Support and Services AppleCare offers a range of support options for the Companys customers. These options include assistance that is built into software products, printed and electronic product manuals, online support including comprehensive product information as well as technical assistance, and the AppleCare Protection Plan (APP). APP is a fee-based service that typically includes two to three years of phone support and hardware repairs, dedicated web-based support resources, and user diagnostic tools. Markets and Distribution The Companys customers are primarily in the consumer, SMB, education, enterprise, government and creative markets. The Company utilizes a variety of direct and indirect distribution channels, such as its retail stores, online stores, and direct sales force, and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. The Company believes that sales of its innovative and differentiated products are enhanced by knowledgeable salespersons who can convey the value of the hardware, software, and peripheral integration, demonstrate the unique digital lifestyle solutions that are available on its products, and demonstrate the compatibility of the Mac with the Windows platform and networks. 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 expand and improve its distribution capabilities by expanding the number of its own retail stores worldwide. Additionally, the Company has 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 integration and support services, and product expertise. 6

Table of Contents One of the Companys customers accounted for 11% of net sales in 2009; there was no single customer that accounted for more than 10% of net sales in 2010 or 2008. Competition The Company is confronted by aggressive competition in all areas of its business. The markets for the Companys products and services are highly competitive. These markets are characterized by frequent product introductions and rapid technological advances that have substantially increased the capabilities and use of personal computers, mobile communication and media devices, and other digital electronic devices. The Companys competitors who sell personal computers based on other operating systems have aggressively cut prices and lowered their product margins to gain or maintain market share. The Companys financial condition and operating results can be adversely affected by these and other industry-wide downward pressures on gross margins. The principal competitive factors include price, product features, relative price/performance, product quality and reliability, design innovation, availability of software and peripherals, marketing and distribution capability, service and support, and corporate reputation. The Company is focused on expanding its market opportunities related to mobile communication and media devices, including iPhone and iPad. The mobile communications and media device industries are highly competitive and include several large, well-funded and experienced participants. The Company expects competition in these industries to intensify significantly as competitors attempt to imitate some of the iPhone and iPad features and applications within their own products or, alternatively, collaborate with each other to offer solutions that are more competitive than those they currently offer. These industries are characterized by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses. The Companys iPod and digital content services have faced significant competition from other companies promoting their own digital music and content products and services, including those offering free peer-to-peer music and video services. The Company believes it offers superior innovation and integration of the entire solution including the hardware (personal computer, iPhone, iPad and iPod), software (iTunes), and distribution of digital content and applications (iTunes Store, App Store and iBookstore). Some of the Companys current and potential competitors have substantial resources and may be able to provide such products and services at little or no profit or even at a loss to compete with the Companys offerings. Alternatively, these competitors may collaborate with each other to offer solutions that are more integrated than those they currently offer. The Companys future financial condition and operating results are substantially dependent on the Companys ability to continue to develop and offer new innovative products and services in each of the markets it competes in. Supply of Components Although most components essential to the Companys business are generally available from multiple sources, certain key components including but not limited to microprocessors, enclosures, certain liquid crystal displays (LCDs), certain optical drives, and application-specific integrated circuits (ASICs) are currently obtained by the Company from single or limited sources, which subjects the Company to significant supply and pricing risks. Many of these and other key components that are available from multiple sources including but not limited to NAND flash memory, dynamic random access memory (DRAM), and certain LCDs, are subject at times to industry-wide shortages and significant commodity pricing fluctuations. In addition, the Company has entered into certain agreements for the supply of key components including but not limited to microprocessors, NAND flash memory, DRAM and LCDs at favorable pricing, but there is no guarantee the Company will be able to extend or renew these agreements on similar favorable terms, or at all, upon expiration or otherwise obtain favorable pricing in the future. Therefore, the Company remains subject to significant risks of supply shortages and/or price increases that can materially adversely affect its financial condition and operating results. 7

Table of Contents The Company and other participants in the personal computer, and mobile communication and media device industries also compete for various components with other industries that have experienced increased demand for their products. In addition, the Company uses some custom components that are not common to the rest of these industries, and new products introduced by the Company often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers yields have matured or manufacturing capacity has increased. If the Companys supply of a key single-sourced component for a new or existing product were delayed or constrained, if such components were available only at significantly higher prices, or if a key manufacturing vendor delayed shipments of completed products to the Company, the Companys financial condition and operating results could be materially adversely affected. The Companys business and financial performance could also be adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source. Continued availability of these components at acceptable prices, or at all, may be affected if those suppliers decided to concentrate on the production of common components instead of components customized to meet the Companys requirements. Substantially all of the Companys Macs, iPhones, iPads, iPods, logic boards and other assembled products are manufactured by outsourcing partners, primarily in various parts of Asia. A significant concentration of this outsourced manufacturing is currently performed by only a few outsourcing partners of the Company, including Hon Hai Precision Industry Co. Ltd. and Quanta Computer, Inc. The Companys outsourced manufacturing is often performed in single locations. Certain of these outsourcing partners are the sole-sourced supplier of components and manufacturing outsourcing for many of the Companys key products, including but not limited to final assembly of substantially all of the Companys Macs, iPhones, iPads and iPods. Although the Company works closely with its outsourcing partners on manufacturing schedules, the Companys operating results could be adversely affected if its outsourcing partners were unable to meet their production commitments. The Companys purchase commitments typically cover the Companys requirements for periods ranging from 30 to 150 days. The Company sources components from a number of suppliers and manufacturing vendors. The loss of supply from any of these suppliers or vendors, whether temporary or permanent, could materially adversely affect the Companys business and financial condition. Research and Development Because the industries in which the Company competes are characterized by rapid technological advances, the Companys ability to compete successfully is heavily dependent upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace. The Company continues to develop new products and technologies and to enhance existing products that expand the range of its product offerings and intellectual property through licensing and acquisition of third-party business and technology. Total research and development expense was $1.8 billion, $1.3 billion and $1.1 billion in 2010, 2009 and 2008, respectively. Patents, Trademarks, Copyrights and Licenses The Company currently holds rights to patents and copyrights relating to certain aspects of its Macs, iPhone, iPad and iPod devices, peripherals, software and services. In addition, the Company has registered and/or has applied to register, trademarks and service marks in the U.S. and a number of foreign countries for Apple, the Apple logo, Macintosh, Mac, iPhone, iPad, iPod, iTunes, iTunes Store, Apple TV, MobileMe and numerous other trademarks and service marks. Although the Company believes the ownership of such patents, copyrights, trademarks and service marks is an important factor in its business and that its success does depend in part on the ownership thereof, the Company relies primarily on the innovative skills, technical competence and marketing abilities of its personnel. The Company regularly files patent applications to protect inventions arising from its research and development, and is currently pursuing thousands of patent applications around the world. Over time, the Company has accumulated a portfolio of several thousand issued patents in the U.S. and worldwide.In addition, the Company currently holds copyrights relating to certain aspects of its products and services. No single patent or copyright is 8

Table of Contents solely responsible for protecting the Companys products. The Company believes the duration of the applicable patents it has been granted is adequate relative to the expected lives of its products. Due to the fast pace of innovation and product development, the Companys products are often obsolete before the patents related to them expire, and sometimes are obsolete before the patents related to them are even granted. Many of the Companys products are designed to include intellectual property obtained from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of its products and business methods, the Company believes, based upon past experience and industry practice, such licenses generally could be obtained on commercially reasonable terms; however, there is no guarantee such licenses could be obtained at all. Because of technological changes in the industries in which the Company competes, current extensive patent coverage, and the rapid rate of issuance of new patents, it is possible certain components of the Companys products and business methods may unknowingly infringe existing patents or intellectual property rights of others. From time to time, the Company has been notified that it may be infringing certain patents or other intellectual property rights of third parties. Foreign and Domestic Operations and Geographic Data The U.S. represents the Companys largest geographic marketplace. Approximately 44% of the Companys net sales in 2010 came from sales to customers inside the U.S. Final assembly of the Companys products is currently performed in the Companys manufacturing facility in Ireland, and by external vendors in California, Texas, the Peoples Republic of China (China), the Czech Republic and the Republic of Korea (Korea). Currently, the supply and manufacture of many critical components is performed by sole-sourced third-party vendors in the U.S., China, Germany, Ireland, Israel, Japan, Korea, Malaysia, the Netherlands, the Philippines, Taiwan, Thailand and Singapore. Sole-sourced third-party vendors in China perform final assembly of substantially all of the Companys Macs, iPhones, iPads and iPods. Margins on sales of the Companys products in foreign countries, and on sales of products that include components obtained from foreign suppliers, can be adversely affected by foreign currency exchange rate fluctuations and by international trade regulations, including tariffs and antidumping penalties. Information regarding financial data by geographic segment is set forth in Part II, Item7 and Item8 of this Form 10-K and in Notes to Consolidated Financial Statements at Note 9, Segment Information and Geographic Data. Seasonal Business The Company has historically experienced increased net sales in its first and fourth fiscal quarters compared to other quarters in its fiscal year due to seasonal demand of consumer markets related to the holiday season and the beginning of the school year; however, this pattern has been less pronounced following the introductions of iPhone and iPad. This historical pattern should not be considered a reliable indicator of the Companys future net sales or financial performance. Warranty The Company offers a basic limited parts and labor warranty on most of its hardware products, including Macs, iPhones, iPads and iPods. The basic warranty period is typically one year from the date of purchase by the original end-user. The Company also offers a 90-day basic warranty for its service parts used to repair the Companys hardware products. In addition, consumers may purchase the APP, which extends service coverage on many of the Companys hardware products in most of its major markets. Backlog In the Companys experience, the actual amount of product backlog at any particular time is not a meaningful indication of its future business prospects. In particular, backlog often increases in anticipation of or immediately following new product introductions as dealers anticipate shortages. Backlog is often reduced once dealers and customers believe they can obtain sufficient supply. Because of the foregoing, backlog should not be considered a reliable indicator of the Companys ability to achieve any particular level of revenue or financial performance. 9

Table of Contents Environmental Laws Compliance with federal, state, local and foreign laws enacted for the protection of the env