Apple Inc

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Apple Inc.

Apple Inc. is an American multinational technology company that designs, develops, and sells consumer
electronics, computer software, and online services. It is one of the world's largest and most valuable
companies. The company is headquartered in Cupertino, California and was founded on April 1, 1976, by
Steve Jobs, Steve Wozniak, and Ronald Wayne. The company initially focused on developing and selling
personal computers, and it gained significant success with the Apple II and Macintosh computers.

Apple is known for its range of popular products, including the iPhone (smartphone), iPad (tablet), Mac
(personal computer), Apple Watch (smartwatch), and Apple TV (media player). The company also offers
various accessories, such as AirPods (wireless earbuds) and HomePod (smart speaker). Apple develops its
own operating systems, including iOS for iPhones and iPads, macOS for Mac computers, watchOS for
Apple Watches and tvOS for Apple TV. These operating systems provide a seamless integration of
hardware and software across Apple's ecosystem. In addition to hardware, Apple provides a range of
services, including iCloud (cloud storage), Apple Music (music streaming), Apple TV+ (video streaming),
Apple Arcade (gaming subscription), Apple News+ (news subscription), and Apple Pay (mobile payment
service).

Apple operates a global chain of retail stores called Apple Stores. These stores offer a wide range of Apple
products, accessories, and services, and provide customer support and educational workshops. The
company is known for its sleek and minimalist store designs. Over the years, Apple has established a
reputation for its innovation, design excellence, and user-friendly interfaces. The company's products are
known for their seamless integration and ecosystem, allowing users to easily connect and share information
across devices. Apple has a strong focus on privacy and security, positioning itself as a champion for
protecting user data. The company also places great emphasis on environmental sustainability and has made
significant strides in reducing its carbon footprint and using renewable energy sources in its operations.
Apple is committed to environmental sustainability. It aims to reduce its carbon footprint, use renewable
energy, and minimize the environmental impact of its products. Apple has made progress in transitioning
to renewable energy sources and has set targets to become carbon neutral across its supply chain by 2030.
In terms of financial performance, Apple has consistently been one of the world's most valuable and
profitable companies. It has a large customer base and a strong global presence, with retail stores in
numerous countries.

Tim Cook succeeded Steve Jobs as CEO in 2011, and under his leadership, Apple has continued to introduce
new products, expand its services, and enter new markets. The company's commitment to innovation and
its loyal customer base have helped it maintain its position as a leading technology company.
Major strategies and initiatives taken by Apple Inc.

Markets and Distribution: The Company’s customers are primarily in the consumer, small and mid-sized
business, education, enterprise and government markets. The Company sells its products and resells third-
party products in most of its major markets directly to consumers, small and mid-sized businesses, and
education, enterprise and government customers through its retail and online stores and its direct sales force.
The Company also employs a variety of indirect distribution channels, such as third-party cellular network
carriers, wholesalers, retailers and resellers. During 2022, the Company’s net sales through its direct and
indirect distribution channels accounted for 38% and 62%, respectively, of total net sales. Here the company
strategically segmented the audience and customers.

Competition: The markets for the Company’s products and services are highly competitive, and are
characterized by aggressive price competition and resulting downward pressure on gross margins, frequent
introduction of new products and services, short product life cycles, evolving industry standards, continual
improvement in product price and performance characteristics, rapid adoption of technological
advancements by competitors, and price sensitivity on the part of consumers and businesses.

Supply of Components: The Company uses some custom components that are not commonly used by its
competitors, and new products introduced by the Company often utilize custom components available from
only one source. Substantially all of the Company’s hardware products are manufactured by outsourcing
partners that are located primarily in Asia, with some Mac computers manufactured in the U.S. and Ireland.

Research and Development: The Company continues to develop new technologies to enhance existing
products and services, and to expand the range of its offerings through research and development (“R&D”),
licensing of intellectual property and acquisition of third-party businesses and technology.

Properties: The Company’s headquarters are located in Cupertino, California. As of September 24, 2022,
the Company owned or leased facilities and land for corporate functions, R&D, data centers, retail and other
purposes at locations throughout the U.S. and in various places outside the U.S. The Company believes its
existing facilities and equipment, which are used by all reportable segments, are in good operating condition
and are suitable for the conduct of its business.

In Fiscal year 2022 strategical steps taken and their outcomes:

Total net sales increased 8% or $28.5 billion during 2022 compared to 2021, driven primarily by higher net
sales of iPhone, Services and Mac. The weakness in foreign currencies relative to the U.S. dollar had an
unfavorable year-over-year impact on all Products and Services net sales during 2022.

The Company announces new product, service and software offerings at various times during the year.
Significant announcements during fiscal 2022 included the following:
First Quarter 2022:

• Updated MacBook Pro 14” and MacBook Pro 16”, powered by the Apple M1 Pro or M1 Max chip; and •
Third generation of AirPods.

Second Quarter 2022:

• Updated iPhone SE with 5G technology;

• All-new Mac Studio, powered by the Apple M1 Max or M1 Ultra chip;

• All-new Studio Display™;

• Updated iPad Air with 5G technology, powered by the Apple M1 chip.

Third Quarter 2022:

• Updated MacBook Air and MacBook Pro 13”, both powered by the Apple M2 chip;

• iOS 16, macOS Ventura, iPadOS 16 and watchOS 9, updates to the Company’s operating systems

• Apple Pay Later, a buy now, pay later service.

Fourth Quarter 2022:

• iPhone 14, iPhone 14 Plus, iPhone 14 Pro and iPhone 14 Pro Max;

• Second generation of AirPods Pro

• Apple Watch Series 8, updated Apple Watch SE and all-new Apple Watch Ultra.

In April 2022, the Company announced an increase to its Program authorization from $315 billion to
$405 billion and raised its quarterly dividend from $0.22 to $0.23 per share beginning in May 2022. During
2022, the Company repurchased $90.2 billion of its common stock and paid dividends and dividend
equivalents of $14.8 billion.

Revenue Recognition: The Company has identified up to three performance obligations regularly included
in arrangements involving the sale of iPhone, Mac, iPad and certain other products. The first performance
obligation, which represents the substantial portion of the allocated sales price, is the hardware and bundled
software delivered at the time of sale. The second performance obligation is the right to receive certain
product-related bundled services, which include iCloud®, Siri® and Maps. The third performance
obligation is the right to receive, on a when-and-if-available basis, future unspecified software upgrades
relating to the software bundled with each device. The Company allocates revenue and any related discounts
to these performance obligations based on their relative SSPs.

Inventories: Inventories are measured using the first-in, first-out method.

Share Repurchase Program: During 2022, the Company repurchased 569 million shares of its common
stock for $90.2 billion under a share repurchase program authorized by the Board of Directors (the
“Program”). The Program does not obligate the Company to acquire a minimum amount of shares. Under
the Program, shares may be repurchased in privately negotiated and/or open market transactions, including
under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.

2022 Employee Stock Plan: In the second quarter of 2022, shareholders approved the Apple Inc. 2022
Employee Stock Plan (the “2022 Plan”), which provides for broad-based equity grants to employees,
including executive officers, and permits the granting of restricted stock units (“RSUs”), stock grants,
performance-based awards, stock options and stock appreciation rights.

Concentrations in the Available Sources of Supply of Materials and Product: The Company uses some
custom components that are not commonly used by its competitors, 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 their
manufacturing capacities have increased. The continued availability of these components at acceptable
prices, or at all, may be affected if suppliers decide to concentrate on the production of common components
instead of components customized to meet the Company’s requirements. Substantially all of the Company’s
hardware products are manufactured by outsourcing partners that are located primarily in Asia, with some
Mac computers manufactured in the U.S. and Ireland.

Value addition: Incremental value to customers by leveraging the power of the devices already in
customer's hands (increasing usage and satisfaction).

Intensive strategy: Apple uses product development as its main intensive strategy for growth. Product
development requires that the company develop attractive and profitable technology products to grow its
market share and business performance.

Apple's value proposition strategy: Premium High-end Products (with a focus on privacy): Apple offers
its customers carefully crafted products with a focus on performance, stability, and privacy, a number of its
customers have stayed around because of this.

FOMO strategy: Fear Of Missing Out is a well-known technique used by marketers. Apple uses a 'product
shortage' technique to makes consumers believe that its models will soon run out; therefore they must hurry
to buy them before it's too late. This sense of urgency pushes the consumer to quickly decide to purchase
the product.

Brand and marketing strategy: Apple's brand strategy and marketing strategy have always made it a point
to promote itself as a luxury brand while focusing on differentiating itself from its competitors. Apple makes
sure that it puts forth the following brand image – Apple competes against itself and not against others.
The Apple Support account embraces all kinds of feedback: good, bad, and everything in between. By
acknowledging people who compliment them and working quickly to solve any gripes, they make everyone
feel valued. This helps encourage valuable feedback and builds lasting relationships with customers.

Basically, there are five business-level strategies that a firm can work on to gain a competitive advantage
including, “cost leadership, differentiation, integrated cost leadership/differentiation, focused cost
leadership and focused differentiation”

Apple's strategy for success is:

• Product innovation
• Quality products
• Better communication with customers
• Distribution through online and offline channels
• Promotion through advertisements, sales promotions, personal selling, and public relations
• Premium pricing strategy and Freemium pricing strategy

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