introduction• The story of Apple starts in 1976• • Apple were the first company to release a home

computer• • Apple is now a multinational corporation that

creates: • - Consumer electronics • - Computer software • - Commercial servers

Founder of Apple Inc. • The founder Steve Wozniak; a brilliant engineer, who developed his own computer at home which was the first of it’s kind• Steve jobs (a good friend of Wozniak’s) was also interested in computers and urged Wozniak to sell his new home computer• Jobs and Wozniak decided to go into business April 1st 1976 as ‘Apple Computers Inc.

The Apple I• Released April 1st 1976• This computer was the first to use a keyboard and could be connected to a T.V screen which was to start a revolution

• The Apple II is an 8-bit home computer; one of the first highly successful mass-produced microcomputers

• The Apple III was a business-oriented personal computer that was intended as the successor to the Apple II series

• The Apple Lisa : Development of the Lisa began in 1978 and was released in 1983

• The Macintosh• Released in 1984• The Macintosh II• In 1987 the Mac II was the

first computer to have computer graphics• The Macintosh Portable• In 1989 the

Macintosh Portable was Apple’s first attempt at building a portable computer.

• The PowerBook 100• In 1991 the PowerBook 100 became the worlds first modern laptop

• Quadra 950 • The Macintosh Quadra 950 was the third desktop computer in Apple Computers ‘Quadra’ line

• The PowerMac 6100• Power Macintosh 6100 was first introduced in 1994

• The iMac• The Original iMac was a revolutionary computer• The traditional computer tower was integrated into the monitor• It was introduced in 1984

• iPod• In 2001 Apple released the iPod• The iPod is the most popular selling mp3 player in world

• iTunes• In 2003 the iTunes music store was launched for both Mac & Windows• This online music store allowed people to easily and legally buy songs over the internet for the first time

• The iMac’s• In 2006 when the first Intel iMac launched, it was clear that Apple had made a good choice• IBM had failed to keep pace with it’s Power PC G5 chip. The new core2 duo chips were vastly superior for performance.

• The iPhone• The iPhone was widely rumored before its launch in 2007• Used the same operating system as the Mac• Multi touch display to control it• Amazing internet experience on a phone• The iPhone has became the worlds most popular phone

• The iPad• In 2010 Apple announced the iPad• A new class of device that fits between a smart phone and a full computer, allowing an unparalleled internet experience and great applications designed specifically for multi touch• The worlds most popular electronic tablet

Mission StatementApple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad."

Apple’s Vision Statement• “We believe that we are on the face of the earth to make great

products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self- honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.”

Four Pillar Strategy

•     Offer a small number of products.•     Focus on the high end•     Give priority to profits over market share•     Create a halo effect that makes people starve for new Apple

products

Competitive Strategy• Apple attempts to increase market demand for its products

through differentiation. Apple has continuously succeeded in creating demand for its products, giving the company power over prices through product differentiation, innovative advertising, ensured brand loyalty, and hype around the launch of new products. By focusing on customers willing to pay more and maintaining a premium price at the cost of unit volume, Apple also set up an artificial entry barrier to competitors.

Competitive Strategy Contd.• Apples ability to quickly adjust, enter and dominate new

markets have shown to be a part of it's competitive advantage. They have shifted from a computer company, to media devices (ipod/ipad) and now smart phones.

• They year by year invest more in research and development. Apple continues to believe that focused investments in R&D are critical to its future growth and competitive position in the marketplace and are directly related to timely development of new and updated products that are central to the Company’s core business strategy.

HR Strategy• "Much of the Company’s future success depends on the

continued availability and service of key personnel, including its Chief Executive Officer, executive team and other highly skilled employees.”

• Apple's new CEO Tim Cook strongly believes in putting the right person in the right role. They only want hard working innovative workers who are committed to work, apple and perfection.

• They many times recruit high quality innovative workers from other companies.

Senior Vice President of Online and Retail Stores

Angela Ahrendts• She has increased Retail employee significantly since she

joined Apple. Unlike John Browett who inflamed Apple’s retail staff by cutting work hours and benefit.

• Ahrendts launched Share Your Ideas, an internal app in which they can propose improvements or lodge complaints.

• Apple says retail employee satisfaction has risen since Ahrendts arrived, and the latest numbers are the highest they’ve ever been.

Acquisition of Beats•Last year, digital track sales fell by 6 percent, while streaming music consumption skyrocketed by 32 percent, according to a report from venture capital firm Kleiner Perkins Caufield & Byers.•Apple CEO Tim Cook said that Apple"could build about anything that you could dream of," adding that acquiring Beats would give them a "head start" and add "kindred spirits" to the company

Apple Products & Services

The company products include the IPod, the IPad, the Mac (PC and laptop), IPhone , Apple TV (released this year in 2015), Apple Watch and all accessories that are necessary for each product. The company’s services include Apple Care, ICloud, Apple Pay, and internet services such as the ITunes Store. Also, The Apple Company has its own operating systems such as iOS, OS X, tvOS, and WatchOS which are used in the products they create.

   2015 Change 2014 Change 2013 Change 2012 Change 2011

$93,864 N/A $65,232 4% $62,739 9% $57,512 50% $38,315$50,337 N/A $40,929 8% $37,883 4% $36,323 31% $27,778$58,715 N/A $29,846 17% $25,417 13% $22,533 78% $12,690$15,706 N/A $14,982 11% $13,462 27% $10,571 94% $5,437$15,093 N/A $10,344 -8% $11,181 4% $10,741 8% $9,902

  $21,462 6% $20,228 7% $18,828 33% $14,127  

    $233,715 28% $ 182,795 7% 170,910$             9% 156,508$  45% 108,249$ Total net sales (in millions)

Americas Europe 

Greater China (a) Japan 

Rest of Asia Pacific Retail 

Net Sales by Operating Segment:

Percentage of sales by each Operating Segment

2015 2014 2013 2012 2011

40% 36% 37% 37% 35%22% 22% 22% 23% 26%26% 16% 15% 14% 12%7% 8% 8% 7% 5%6% 6% 7% 7% 9%

12% 12% 12% 14%

   $108,249

Total net sales (in millions)

$233,715 182,795$ $170,910 $156,508

Europe Greater China (a) 

Japan Rest of Asia Pacific 

Retail 

Net Sales by Operating Segment: Americas 

Americas  Europe  Greater China (a)  Japan  Rest of Asia Pacific 

$62,016.40 $33,333.82 $38,915.29 $10,387.75 $10,000.14$9,290.80 $4,993.81 $5,829.98 $1,556.21 $1,498.14$10,188.40 $5,476.27 $6,393.22 $1,706.56 $1,642.88

$7,963.60 $4,280.44 $4,997.16 $1,333.90 $1,284.13$4,026.80 $2,164.41 $2,526.82 $674.49 $649.32

Total net sales (in millions) $93,486 $50,248.75 $58,662.47 $15,658.91 $15,074.61

Other Products

IphoneIpadMacIpod

Services

Operating Segments:

Year Ended 2015

Net Sales by Product: 

Americas  Europe  Greater China (a)  Japan  Rest of Asia Pacific  Retail 

$16,283.29 $11,821.49 $5,381.76 $2,299.90 $4,139.82 $6,209.73$6,785.47 $4,926.18 $2,242.66 $958.40 $1,725.12 $2,587.68$7,711.18 $5,598.23 $2,548.61 $1,089.15 $1,960.47 $2,940.71$2,638.36 $1,915.42 $872.00 $468.65 $670.77 $1,006.16$3,318.04 $2,408.86 $1,096.64 $1,333.90 $843.57 $1,265.36$1,583.80 $1,149.82 $532.46 $223.70 $402.66 $603.99

$14,613.63$9,742.41$6,373.70$12,674.13$27,820Total net sales (in 

millions) $38,320.14

Year Ended 2011Operating Segments:

IphoneIpadMacIpod

Itunes, Software & ServicesAccessories

Net Sales by Product: 

Percentage Change in Products according to Segments 2015 vs. 2011

Americas  Europe  Greater China (a)  Japan  Rest of Asia Pacific 

381% 282% 723% 452% 242%37% 1% 260% 62% -15%32% 2% 251% 57% -19%

244% 81% 463% 246% 55%Total Sales % Change of  2015 vs 2011

Operating Segments:Net Sales by Product: 

IphoneIpadMac

2015 2014 2013 2012 2011iPhone  231,218 37% 169,219 13% 150,257 20% 125,046 73% 72,293iPad  54,856 -19% 67,977 -4% 71,033 22% 58,310 80% 32,394Mac  20,587 9% 18,906 16% 16,341 -10% 18,158 9% 16,735iPod  14,377 -45% 26,379 -25% 35,165 -17% 42,620

Unit Sales by Product: 

2015 vs. 2011 2014 vs 2011iPhone  320% iPod  -34%iPad  69%

Mac  23%

Income Statement

Apple Inc. Income Statement

• Net Sales and Revenue of 231.28 Billion Dollars

• Gross Income of 89.03 Billion Dollars

• Net Income of 53.39 Billion Dollars

Revenues2011 2012 2013 2014 2015

 Sales/Revenue 108.6B

155.97B

170.87B

182.35B

231.28B

 Cost of Goods Sold (COGS) incl. D&A

64.08B

87.92B

107.24B

111.96B

142.26B

COGS excluding D&A 62.26B

84.64B

100.48B

104.02B 131B

Depreciation & Amortization Expense 1.81B 3.28B 6.76B 7.95B 11.26

BDepreciation 1.62B 2.6B 5.8B 6.85B 9.96BAmortization of Intangibles 192M 677M 960M 1.1B 1.3B

 Gross Income 44.52B

68.06B

63.63B

70.38B

89.03B

Sales and Revenues Breakdown

66%10%11%

9%4%

Sales BreakdowniPhone iPad Mac Services Other Products 

Net Sales by Product:    2015 2014    2013

iPhone     155,041 52%    101,991 12%    91,279

iPad     23,227 -23%    30,283 -5%    31,980

Mac     25,471 6%    24,079 12%    21,483

Services     19,909 10%    18,063 13%    16,051

Other Products     10,067 20%    8,379 -17%    10,117

Total net sales    233,715 28%    182,795 7%    170,910

Total net salesiPhone 

iPad Mac 

Services Other Products 

0 100,000 200,000 300,000233,715

155,04123,22725,47119,909

10,067

Sales Breakdown

Sales by Country

Americas Europe Greater China

Japan Rest of Asia Pacific

93,864

50,337

58,715

15,706 15,093

Operating Segment

Expenses 2011

2012

2013

2014

2015

 SG&A Expense 10.03B

13.42B

15.31B

18.03B

22.4B

Research & Development

2.43B

3.38B

4.48B

6.04B

8.07B

Other SG&A 7.6B 10.04B

10.83B

11.99B

14.33B

Unusual Expense 862M

(607M) - 205

M 0

EBIT after Unusual Expense

(862M)

607M - (205

M) 0

Non Operating Income/Expense 54M (566

M)352

M(72M) 3.7B

Non-Operating Interest Income

519M

1.09B

1.62B 1.8B 2.92

B

 Interest Expense 0 - 136M

384M

733M

Gross Interest Expense 0 - 136M

384M

733M

Interest Capitalized 0 0 0 0 0

 Pretax Income 34.21B

55.76B

50.16B

53.48B

72.52B

Net Income 25.92B

41.73B

37.04B

39.51B

53.39B

Balances Sheet AssetsFiscal year is October-September. All values USD millions.

2011

2012

2013

2014

2015

 Cash & Short Term Investments

25.95B

29.13B

40.55B

25.08B 41.6B

Cash Only 2.9B 3.11B 8.71B 10.23B

19.06B

Short-Term Investments 23.05B

26.02B

31.84B

14.85B

22.55B

 Total Accounts Receivable 11.72B

18.69B

20.64B

27.22B

30.34B

Accounts Receivables, Net 5.37B 10.93B 13.1B 17.46

B16.85

BAccounts Receivables, Gross 5.42B 11.03

B 13.2B 17.55B

16.93B

Bad Debt/Doubtful Accounts (53M) (98M) (99M) (86M) (82M)

Other Receivables 6.35B 7.76B 7.54B 9.76B 13.49B

Inventories 776M 791M 1.76B 2.11B 2.35BFinished Goods 776M 791M 1.08B 1.64B 2.35BWork in Progress 0 0 0 0 0Raw Materials 0 0 683M 471M 0Progress Payments & Other - - - - -

Other Current Assets 6.54B 9.04B 10.34B

14.12B

15.09B

Miscellaneous Current Assets 5.82B 7.84B 10.34B

14.12B

15.09B

Total Current Assets 44.99B

57.65B

73.29B

68.53B

89.38B

2011

2012

2013

2014

2015

Net Property, Plant & Equipment

7.78B

15.45B

16.6B

20.62B

22.47B

Property, Plant & Equipment - Gross

11.77B

21.89B

28.52B

39.02B

49.26B

Buildings 2.06B

2.44B

3.31B

4.86B

6.96B

Land & Improvements - - - - -Computer Software and Equipment - - - - -

Other Property, Plant & Equipment

2.78B

3.71B

3.97B

4.51B

5.26B

Accumulated Depreciation 3.99B

6.44B

11.92B

18.39B

26.79B

Total Investments and Advances

55.62B

92.12B

106.22B

130.16B

164.07B

Other Long-Term Investments

55.62B

92.12B

106.22B

130.16B

164.07B

Long-Term Note Receivable 0 0 0 0 0

Intangible Assets 4.43B

5.36B

5.76B

8.76B

9.01B

Net Goodwill 896M 1.14B

1.58B

4.62B

5.12B

Net Other Intangibles 3.54B

4.22B

4.18B

4.14B

3.89B

Other Assets 3.56B

5.48B

5.15B

3.76B

5.56B

Tangible Other Assets 1.96B

2.48B

5.15B

3.76B

5.56B

 Total Assets116.37

B

176.06

B207

B231.84

B

290.48

B

Total Assets 116.37B

176.06B 207B 231.

84B290.48B

Total Liabilities 39.76B

57.85B

83.45B

120.29B

171.12B

Liabilities & Shareholders' Equity

116.37B

176.06B 207B 231.

84B290.48B

2011

2012

2013

2014

2015

Ratios 

2015 2014 2013Profitability RatioGross Profit Margin 37.24% 38.60% 38.49%

Operating Profit Margin 86.89% 90.11% 93.38%

Net Profit Margin 42.44% 29.33% 21.19%

Total Return on Asset 25.41% 23.49% 24.23%

Net Return on Total Assets 24.96% 23.07% 23.67%

Return on Stockholder Equity 60.75% 47.95% 39.66%

Return in Invested Capital 41.96% 38.06% 34.87%

Liquidity Ratio

Current Ratio110.88

%108.01

%167.87

%Working capital 877 508 2963

Leverage Ratio

Debt-to-Equity Ratio 82.00% 31.65% 13.73% Long-term Debt-to-Equity Ratio 44.79% 25.99% 13.73%

Gross Profit Margin

Operating Profit Margin 

Net Profit Margin

Total Return on Asset

Net Return on Total Assets

Return on Stockholder Equity

Return in invested Capital

0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%100.00%

Profitability Ratio

2015 2014 2013

Research and Development

• Apple Spends 3% of total revenues On research and development“The Company continues to believe that focused investments in R&D are critical toits future growth and competitive positionin the marketplace and are directly related to timely development of new and updated products that are central to the Company’s core business strategy”

Progression

Apple 2010• Record Mac, iPhone, and iPad sales • Revenue of $20.34 billion and net quarterly profit of $4.31

billion, or $4.64 per diluted share • 27 percent more macbooks and 91 percent more iPhones

than the year before• 11 percent decrease iPod sales • International sales accounted for 57 percent of the quarter’s

revenue• Music related products and services sales increased by 912

million (23%) compared to 2009.

Apple 2011• Record in Mac and IPad sales• quarterly revenue was recorded as 28.27 billion and diluted

EPS of 7.05. • 17.07 million (21 percent increase) 4.89 million (a 26 percent

increase) • 6.62 million iPods, a 27 percent unit decline from the year-ago

quarter• Annual revenue grew to 108 billion. • Music related sales increase (6.3 billion or 28 percent

compared to the previous year)

Apple 2012• iPhones sales of 26.9 million (58 percent increase compared to

the previous year). • Revenue for the year was now 36 billion and diluted EPS of

8.67• 1 percent increase (4.9 million) in Mac (demand for macbook

air) • 26 (14 million) percent increase in iPads• Instruction of the new iPad in March • iPod sales continued to decrease by 19 percent (5.3 million)• Declared dividends of 2.65 dollars per common share

Apple 2013• iPhone sales generated a 26 (33.8 million) percentage growth. • Revenues and diluted EPS was 37.5 billion and 8.26

respectively. • iPad sales increase .1 million increase from the previous years.• Sold 4.6 million Macs, compared to 4.9 million from the

previous year. • Apple declared dividend for another of 3.05 per common share

Apple 2014• Revenue of 42.1 billion• Launched the iPhone 6 and 6 plus. • Net sales increased by 11 percent • Mac sales increase • Ipod sales continues to decrease as the demand for new

technology increases • Preview of the apple watch • Acquired Beats Music, LLC, Beats Electronics, LLC,.

Apple Statemen

t of Cashflow

Operating Activities

Why did net income decrease by 11% in 2013 and 66% in 2014 ?• Decrease in IPod and IPad sales .Deprecation/ Amortization increase by 106%(2013),17.5%(2014)Due to acquisition of Beats LLCWhat caused decrease in deferred income tax expense decrease 74%(2013),increase 1.05%(2014)• International earning to be reinvested outside

U.S(Potential cause for tax decrease )Why A/R decreased in 2013,decreased by 61%(2013) and increased by 95%(2014)

Dramatic inventory increased in 2013 by 64% and decreased by 93% in 2014. Often currents / non correct assets increase ,increase by 69%(2013) and decreased by 86%(2014)Decrease in account payable by 48%(2013)However increased by 1.5%(2014)Non Current liabilities rose, increased by 78%(2013) and increased 33%(2014)• Long term debt contributed by floating and fix rate

notes

• Cash from operating A ,increased by 55 %(2013) and increased by 11.3%(2014)

Continuation of Operating Activities

Investing Activities Proceeds from market table securities ,decreased by 2%(2013) and increased by 46.2%(2014)Proceeds from sales of marketable securities ,Increased by 56%(2013) and decreased by 7.4 % (2014)• Issued 5.1 million shares of beats p/s at485 and c/s

417(millions) Increase payments M+A, Increased 42% and 660%• Company acquired Beats Music U.S for 2.6 billion Payment for acquisition PPE, decreased by 1.5 %(2013) and increased by 17.3%(2014)Cash from IA, decreased by 31%(2013) and 33%(2014)

Financial Activities Proceeds from c/s ,decreased by 20.3%(2013) and increased by 38%(2014)Excess tax benefits from equity awards , decreased by 48%(2013) and increased 5.4% (2014)• Received income tax benefits from employee stock plan

awards .Tax paid related to not net share settlement ,decreased by 12%(2013) and increased 7%(2014) .T/S decreased by 97%

Proceeds from insurance of commercial paper .Cash from FA, decreased 864%(2013) and decreased by 130%(2014).Cash + Cash equivalent ,increased 278%(2013),and decreased 88%(2014) .

• Proceeds from insurance of commercial paper .

• Cash from FA, decreased 8.64%, and decreased by 130%.

• Cash + Cash equivalent ,increased 278%,and decreased 88% .

Continuation of Financial Activities

SWOT-Analysis

STRENGTHBrand reputation:

Apple is the number 1 brand around the world. Its brand value is $145.3 Billion now.

Customer Loyalty:Apple has achieved millions of its loyal customer due to its high quality products and loyal customer services.

Excellent Research and Development:Apple has excellent Research and

Development Division.

Strong financial performance:Apple has best financial performance among many top companies. It has higher gross profit margin among its competitors. It has no debt.

Strong marketing and advertising teams:Apple has excellent marketing and

advertising strategies. Apple has been selected as the winner or co-winner for five consecutive years.

Multiple Products: Apple has too many excellent products liked by the millions of customers. (e.g. MAC, iphone, ipad, ipod, tv, iwatch...)

Apple owns their Operating System:Apple owns their Operating System (iOS), which is used across their entire

product line allowing them to sell a complete product without paying large royalty payments to their competitors. High skilled man powers :

Apple has experienced, well-trained, enthusiastic and motivated work force.

Leading innovator:Apple is an innovator and technology leader. Apple has been chosen as the most innovative business in the world for the 3rd time in 2012.

 Weaknesses:High price:

Apple has been selling its products in a higher price. Price sensitive consumers would not buy its products frequently.

Decreasing market share:Apple's Worldwide iPhone Market Share has been declining (Forbes APR 6, 2015)

 Patent infringements:

Apple was ordered to pay $533 million for patent infringement to the firm Smartflash LLC.

Further changes in management:Apple has lost its visionary CEO Steve Jobs.

Security Threats:Apple’s customers has increased chances of phishing attacks by hackers as they spend more time focusing on Apple’s security weaknesses.

Incompatibility with different Operating Systems:Apple uses its own Operating System iOS which is not compatible with the other operating systems.

 Opportunity:

High demand of Apple's products:There is a huge demand of Apple products in the market.

Growth of smart phone markets:Apple is a leading firm in mobile

technology. The smart phones market has been significantly increasing globally.  Growth of mobile advertising market:

The growth of mobile advertising market is also a good opportunity to Apple.

Increasing popularity of cloud based services:Now, cloud-based services is expanding in the market. So, Apple could expand its range of iCloud services and softwares as the market demands.

 Online stores and retail stores:

Apple has 453 retail stores in 16 countries and online stores available in 39

countries.

Threats:Strong competition:

There is a strong competition in the market which threats apple. (Samsung,

Google, Microsoft, Nokia etc.)

Change in technology:Technology has been changing rapidly. This phenomenon keeps Apple under the pressure to release new products faster and faster.

Increase in tax:The increase in tax will negatively affect the company.

 Dollar Appreciation:

Apple earns more than half of its revenues from outside the US. Dollar appreciation against other currencies reduces potential profits from those countries.

 Increasing salary:

The increasing salary for employees will likely to raise the prices for Apple products.

Potent Risk to Company (Tax Evasion)

• Apple Inc. for tax reasons is a Irish Company• Apple does not do operations or have employees

in Ireland• Ireland tax rate is 12.5% vs. United State 35%• May have to payback 10 years of taxes, which the

company is unable to estimate• Forbs estimate 44 billion dollars in taxes not paid

for the last 3 years.

Suggestion• With Apple going into the Stream they should

start creating original content

Conclusion• Apple Incorporated was a very successful

company for the year of 2015, however due to the constant change in the technology industry Apple needs to current to have the competitive edge as they can in an instance be irrelevant.