Apple Inc. (Apple), incorporated on January 3, 1977, along with its subsidiaries, is engaged in designing, manufacturing and marketing mobile communication and media devices, personal computers, and portable digital music players. It also sells a range of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and Mac OS X operating systems, iCloud, and a range of accessory, service and support offerings. It also sells and delivers digital content and applications through the iTunes Store, App Store, iBookstore, and Mac App Store. During the year ended November 24, 2011, the Company, as part of a consortium, acquired Nortel Networks Corporation’s patent portfolio. In February 2012, the Company acquired app-search engine Chomp.
Apple sells its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and resellers. In addition, the Company sells a range of third-party iPhone, iPad, Mac 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 consumers, small and mid-sized businesses (SMB), and education, enterprise and government customers. The Company has designed a range of products, services and programs to address the needs of education customers. It also supports mobile learning and real-time distribution and accessibility of education related materials through iTunes U, a platform that allows students and teachers to share and distribute educational media online. It sells its products to the education market through its direct sales force, select third-party resellers and its online and retail stores. It also sells its hardware and software products to enterprise and government customers.
The Company operates in five segments: Americas, Europe, Japan, Asia-Pacific and Retail. 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 countries, other than Japan. The Retail segment operates Apple-owned retail stores worldwide. The Company offers a range of mobile communication and media devices, personal computing products, and portable digital music players, as well as a variety of related software, services, peripherals, networking solutions and third-party hardware and software products. In addition, the Company offers its own software products, including iOS, the Company’s mobile operating system; Mac OS X, the Company’s operating system software for the Mac; server software and application software for consumer, SMB, and education, enterprise and government customers. AppleCare offers a range of support options for the Company’s customers. These options include assistance that is built into software products, printed and electronic product manuals, online support, including product information, as well as technical assistance, and the AppleCare Protection Plan (APP). APP is a fee-based service that includes two to three years of phone support and hardware repairs, dedicated Web-based support resources, and user diagnostic tools.
iPhone
The Company’s iPhone combines a mobile phone, an iPod, and an Internet communications device in a single handheld product. Based on the Company’s Multi-Touch user interface, iPhone features desktop-class e-mail, 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 e-mail accounts. iPhone allows customers to access the iTunes Store to download audio and video files, as well as a range of other digital content and applications. In October 2011, the Company launched iPhone 4S, its latest version of iPhone, which includes Siri, a voice activated intelligent assistant.
iPad
The Company’s iPad is a multi-purpose mobile device for browsing the Web, reading and sending e-mail, viewing photos, watching videos, listening to music, playing games, reading e-books and more. iPad is based on the Company’s 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 range of other digital content and applications. In March 2011, the Company introduced iPad 2, its second-generation iPad.
Mac Hardware Products
The Company offers a range of personal computing products, including desktop and portable computers, related devices and peripherals, and third-party hardware products. The Company’s Mac desktop and portable systems feature Intel microprocessors, the Mac OS X Lion operating system and the iLife suite of software for creation and management of digital photography, music, movies, digital versatile discs (DVDs) and Websites. The Company’s desktop computers include iMac, Mac Pro and Mac mini. The iMac desktop computer has an all-in-one design that incorporates a display, processor, graphics card, storage, memory and other components inside a single enclosure. The Mac Pro desktop computer is for business and professional customers. The Mac mini is a desktop computer in a compact enclosure. Its portable computers include MacBook Pro and MacBook Air. MacBook Pro is a portable computer designed for professionals and consumers. MacBook Air is an ultra-slim portable computer designed for professionals and consumers.
iTunes
The Company’s iTunes is an application that supports the purchase, download, organization and playback of digital audio and video files and is available for both Mac and Windows-based computers. iTunes 10 is the latest version of iTunes and features AirPlay wireless music playback, Genius Mixes, Home Sharing, and improved syncing functionality with iOS devices. iTunes is integrated with the iTunes Store, a service that allows customers to discover, purchase, rent, and download digital content and applications. The iTunes Store includes the App Store and iBookstore. The App Store allows customers to discover and download applications, and the iBookstore features electronic books from major and independent publishers and allows customers to preview and buy books for their iOS devices. Customers can access the App Store through either a Mac or Windows-based computer or through an iOS device. The iBookstore is accessed through the iBooks application on an iOS device.
Mac App Store
In January 2011, the Company opened the Mac App Store allowing customers to discover, download and install applications for their Macs. The Mac App Store offers applications in education, games, graphics and design, lifestyle, productivity, utilities and other categories. The Company’s Mac OS X operating system software and iLife and iWork application software are also available on the Mac App Store.
iCloud
In October 2011, the Company launched iCloud, its new cloud service, which stores music, photos, applications, contacts, calendars, and documents and wirelessly pushes them to multiple iOS devices, Macs and Windows-based computers. iCloud’s features include iTunes in the Cloud, Photo Stream, Documents in the Cloud, Contacts, Calendar, Mail, automatic downloads and purchase history for applications and iBooks, and iCloud Backup. Users can sign up for free access to iCloud using a device running iOS 5 or a Mac running Mac OS X Lion
Software Products and Computer Technologies
The Company offers a range of software products for consumer, SMB, education, enterprise and government customers, including the Company’s iOS and Mac OS X operating system software; server software; professional application software, and consumer, education, and business oriented application software.
Operating System Software
iOS is the Company’s mobile operating system that serves as the foundation for iOS devices. In October 2011, the Company released iOS 5, which supports iCloud and includes new features, such as Notification Center, a way to view and manage notifications in one place; iMessage, a messaging service that allows users to send text messages, photos and videos between iOS devices; and Newsstand, a way to purchase and organize newspaper and magazine subscriptions. Mac OS X, the operating system for Macs, is built on an open-source UNIX-based foundation. Mac OS X Lion includes support for new Multi-Touch gestures; iCloud integration; system-wide support for full screen applications; Mission Control, a way to view everything running on a user’s Mac; the Mac App Store; Launchpad, a new home for a user’s applications, and a redesigned Mail application.
Application Software
iLife ’11 is the latest version of the Company’s digital lifestyle application suite included with all Mac computers. iLife features iPhoto, iMovie, iDVD, GarageBand, and iWeb. iPhoto is the Company’s consumer-oriented digital photo application and iMovie is the Company’s digital video editing software application. iDVD is the Company’s software application that enables customers to turn iMovie files, QuickTime files, and digital pictures into interactive DVDs. GarageBand is the Company’s music creation 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 ’09 is the latest version of the Company’s integrated productivity suite designed to help users create, present, and publish documents, presentations, and spreadsheets. iWork ’09 includes Pages ’09 for word processing and page layout, Keynote ’09 for presentations, and Numbers ’09 for spreadsheets. The Company also has a Multi-Touch version of each iWork application designed specifically for use on iOS devices.
Other Application Software
The Company sells various other application softwares, including Final Cut Pro, Logic Studio, Logic Express 9, Logic Studio Pro, and its FileMaker Pro database software. The Company manufactures the Apple LED Cinema Display and Thunderbolt Display. It also sells a range of Apple-branded and third-party Mac-compatible and iOS-compatible peripheral products, including printers, storage devices, computer memory, digital video and still cameras, and various other computing products and supplies. Apple TV allows customers to watch movies and television shows on their high definition television. Content from iTunes, Netflix, YouTube, and Flickr, as well as music, photos, videos, and podcasts from a Mac or Windows-based computer can also be wirelessly streamed to a television through Apple TV. With the release of iCloud in October 2011, content purchased on Apple TV can be re-downloaded on iOS devices.
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