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Apple Inc.

Microcomputer design and manufacturing company, the first successful personal-computer


company. It was founded in 1976 by Steven P. Jobs and Stephen G. Wozniak, whose first
computer was manufactured in the Jobs family's garage. The Apple II (1977), with its plastic case
and colour graphics, launched the company to success, earning Apple over $100 million by 1980,
the year the company first offered stock to the public. The 1981 introduction of IBM's PC, running
a Microsoft Corp. operating system, marked the beginning of long-term competition for Apple in
the personal-computer market. The Macintosh, introduced in 1984, was the first personal
computer to use a graphical user interface and a mouse. The "Mac" initially sold poorly, and Jobs
left the company in 1985, but eventually it found its niche in the desktop publishing market.
Meanwhile, Microsoft's Windows operating system eroded Apple's market share. Apple recalled
Jobs in 1997. He returned the company to profitability by introducing more innovative products,
such as the iMac. Apple introduced iTunes, software for playing music that has been converted to
the MP3 format, and the iPod portable MP3 music player in
2001; in 2003 the company began selling downloadable copies
of major record company songs in MP3 format over the
Internet. Apple aims for nothing short of a revolution, whether
in personal computing or digital media distribution. The
company's desktop and laptop computers -- all of which
feature its OS X operating system -- include its Mac mini, iMac,
and MacBook for the consumer and education markets, and
more powerful Mac Pro and MacBook Pro for high-end
consumers and professionals involved in design and publishing. Apple scored a runaway hit with
its digital music players (iPod) and online music store (iTunes). Other products include mobile
phones (iPhone), servers (Xserve), wireless networking equipment (AirPort), and publishing and
multimedia software. Apple gets more than half of its sales in the US. (Apple Inc., Cupertino, CA,
www.apple.com) A manufacturer of computers and consumer electronics, Apple is the industry's
most fabled story. Founded in a garage by Steve Wozniak and Steve Jobs and guided by Mike
Markkula, Apple blazed the trails for the personal computer industry. Apple was formed on April
Fool's Day in 1976. After introducing the Apple I at the Palo Alto Homebrew Computer Club, 10
retail stores were selling them by the end of the year.

Key numbers for fiscal year ending September, 2009:


Sales: $36,537.0M
One year growth: 12.5%
Net income: $5,704.0M

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Income growth: 18.0%

Officers:
Chairman: William V. (Bill) Campbell
CEO and Director: Steven P. (Steve) Jobs
COO: Timothy D. (Tim) Cook

Competitors:
Dell
Hewlett-Packard
Microsoft

Stock Quote
AAPL - Apple Inc (NASDAQ GS) 12:00 AM ET, 03/26/2010

Last: 230.90 Change: +4.25 %Change: +1.88% Volume: 22,888,300

Open: 228.95
High: 231.95
Low: 228.55
Previous Close: 226.65
Market Cap: 209.38B

Shares Outstanding: 906.8M

EPS: 10.25 52wk High (3/25/2010): 230.97


P/E Ratio: 22.53 52wk Low (3/30/2009): 102.61
Dividend: 0.00 Dividend Date: N/A
Yield: 0.00 Average Volume: 18.9M
Stock Chart

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Corporate Culture
Apple 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.[104]

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. Apple Fellows are those who have 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,[105] Steve Capps,[106] Rod
Holt,[105] Alan Kay,[107][108] Guy Kawasaki,[107][109] Al Alcorn,[110] Don Norman,[107] Rich
Page,[105] and Steve Wozniak.[105]

Users
According to surveys by J. D. Power, Apple has the highest brand and repurchase loyalty of any
computer manufacturer. While this brand loyalty is considered unusual for any product, Apple

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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".[111] 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 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. Mac developers in turn 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.[112] 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.[113] The Ginza opening in Tokyo was estimated in the thousands
with a line exceeding eight city blocks.[114]

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."[115]

Market research indicates that Apple draws its customer base from an unusually artistic, creative,
and well-educated population, which may explain the platform's visibility within certain youthful,
avant-garde subcultures.[116]

Corporate affairs
Apple has a history of vertical integration in their products, manufacturing the hardware on which
they pre-install their software.[citation needed]

During the Mac's early history Apple generally refused to adopt prevailing industry standards for
hardware, instead creating their own.[117] 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.[118] FireWire is an
Apple-originated standard that has seen widespread industry adoption after it was standardized
as IEEE 1394.[119]

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Ever since the first Apple Store opened, Apple has sold third party accessories.[120] 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,[121] 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 editorial policy.[122]

Headquarters
Apple Inc., 1 Infinite Loop, Cupertino, CA.Apple 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.[123]

In 2006, Apple announced its intention to build a second campus on 50 acres (200,000 m2)
assembled from various contiguous plots. The new campus, also in Cupertino, will be about 1
mile (1.6 km) east of the current campus.[124]

CEOs
1977–1981: Michael "Scotty" Scott
1981–1983: A. C. "Mike" Markkula
1983–1993: John Sculley
1993–1996: Michael Spindler
1996–1997: Gil Amelio
1997–present: Steve Jobs (Interim CEO 1997–2000)
2004 & 2009: Tim Cook

Directors
See also: Category:Directors of Apple Inc.
Bill Campbell, Chairman of Intuit Inc.
Millard Drexler, Chairman and CEO of J.Crew
Al Gore, Former Vice President of the United States
Steve Jobs, CEO and Co-founder of Apple; also a director of The Walt Disney Company
Andrea Jung, Chairman and CEO of Avon Products
Arthur D. Levinson, Chairman and CEO of Genentech
Jerry York, Chairman, President, and CEO of Harwinton Capital

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Executives
Steve Jobs, Chief Executive Officer
Timothy D. Cook, Chief Operating Officer
Peter Oppenheimer, Chief Financial Officer
Philip W. Schiller, Senior Vice President of Worldwide Product Marketing (replacement for Steve
Jobs during hospitalization)
Mark Papermaster, Senior Vice President of Devices Hardware Engineering
Jonathan Ive, Senior Vice President of Industrial Design
Bertrand Serlet, Senior Vice President of Software Engineering
Ron Johnson, Senior Vice President of Retail
Sina Tamaddon, Senior Vice President of Applications
Scott Forstall, Senior Vice President of iPhone Software
Bob Mansfield, Senior Vice President Mac Hardware
Daniel Cooperman, General Counsel and Secretary

Historical Remarks

1976–1980: The early years

The Apple I, Apple's first product. Sold as an assembled circuit


board, it 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 April 1, 1976 by Steve Jobs, Steve


Wozniak, and Ronald Wayne,[1] to sell the Apple I personal
computer kit. They were hand-built by Wozniak[15][16] and first shown to the public at the
Homebrew Computer Club.[17] 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.[18] The
Apple I went on sale in July 1976 and was market-priced at $666.66 ($2.55 thousand in 2010
dollars, adjusted for inflation.)

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.

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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 5 1/4 inch floppy disk drive and interface, the Disk II

The Apple II was chosen to be the desktop platform for the first "killer app" of the business world
—the VisiCalc spreadsheet program.[28] VisiCalc created a business market for the Apple II, and
gave home users an additional reason to buy an Apple II—compatibility with the office. [28]
According to Brian Bagnall, Apple exaggerated its sales figures and was a distant third place to
Commodore and Tandy until VisiCalc came along.

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.

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 of Apple at the pre-IPO price of $10 a share.[32] 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.

In December 1980, Apple launched the initial public offering of its stock to the investing public.
[citation needed]
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. Several venture capitalists cashed out, reaping billions in long-term capital gains.

1981–1985: Lisa and Macintosh

The heroine 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 titles.[34]

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The first Macintosh, released in 1984.The Macintosh initially sold well, but follow-up sales were
not strong.[39] This was because of the again high price tag, as well as limited 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 point, and PageMaker, an early desktop publishing
package. The Mac was particularly powerful in this market due to its advanced graphics
capabilities, which were already necessarily 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.[40]

In 1985, a power struggle developed between Jobs and CEO John Sculley, who had been hired
two years prior.[41] Apple's board of directors sided with Sculley and Jobs was removed from his
managerial duties.[39] Jobs resigned from Apple and founded NeXT Inc. the same year.[42]

Apple's sustained growth during the early 1980s was in great part due to its leadership in the
education sector, attributed to an implementation of the LOGO Programming Language by Logo
Computer Systems Inc., (LCSI), for the Apple II platform. The success of Apple and LOGO in the
education environment provided Apple with a broad base of loyal users around the world. The
drive into education was accentuated in California by a momentous agreement concluded
between Steve Jobs and Jim Baroux of LCSI, agreeing with the donation of one Apple II and one
Apple LOGO software package to each public school in the state. The arrangement, eventually
replicated in Texas, established a strong and pervasive presence for Apple in all schools
throughout California, that ignited the acquisition of Apple IIs in schools across the country. The
conquest of education became critical to Apple's acceptance in the home, as parents supported
continued learning experience for children after school.

1986–1993: Rise and fall

See also: Timeline of Apple II family and 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 and
ergonomic layout of the laptop computer.[43] The Macintosh
Portable was designed to be just as powerful as a desktop Macintosh and turned out 17 pounds
with a 12 hour battery life. Apple sold fewer than 100,000 units.[citation needed] The Powerbook was 7

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pounds and had a 3 hour battery life, and sold a billion dollars worth within the first year.[citation needed]
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 led to increasing revenue.[41] 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 has 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.

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. Ultimately, all of this proved too-little-too-
late for Apple as their market share and stock prices continued to slide.

Apple saw the Apple II series as too expensive to produce, while taking away sales from the low
end Macintosh.[44] 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.[45] 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.[46] 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.[47] The lawsuit dragged on for years before it was thrown
out of court. At the same time, a series of major product flops and missed deadlines sullied
Apple's reputation, and Sculley was replaced by Michael Spindler.[48]

1994–1997: Attempts at reinvention

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The Newton was Apple's first foray into the PDA markets, as well as one of the first in the
industry. A financial flop, 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. The Macintosh platform was becoming outdated since 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.[49]

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.[50]

In 1996, Michael Spindler was replaced by Gil Amelio as CEO. Gil Amelio made many changes at
Apple, including massive layoffs.[51] 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. [52] 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.[53]

On November 10, 1997, Apple introduced the Apple Store, tied to a new build-to-order
manufacturing strategy.[54][55]

1998–2005: Return to profitability

Company headquarters on Infinite Loop in Cupertino, California.

On August 15, 1998, Apple introduced a new all-in-one computer


reminiscent of the Macintosh 128K: the iMac. The iMac design

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team was led by Jonathan Ive, who would later design the iPod and the iPhone.[56][57] The iMac
featured modern technology and a unique design. It sold close to 800,000 units in its first five
months and returned Apple to profitability for the first time since 1993.[58]

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.[59]
The following year, Apple released two video editing products: iMovie for consumers, and Final
Cut Pro for professionals, the latter of which has gone on to be a significant video-editing
program, with 800,000 registered users in early 2007.[60] In 2002 Apple purchased Nothing Real
for their advanced digital compositing application Shake,[61] as well as Emagic for their music
productivity application Logic, which led to the development of their consumer-level GarageBand
application.[62][63] iPhoto's release the same year completed the iLife suite.[64]

The entrance of the Apple Store on Fifth Avenue in New York City is a glass cube, housing a
cylindrical elevator and a spiral staircase that leads into the
subterranean store.

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.[65]

On May 19, 2001, Apple opened the first official Apple Retail Stores in Virginia and California.[66]
The same year, Apple introduced the iPod portable digital audio player. The product was
phenomenally successful — over 100 million units were sold within six years.[67][68] 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.[69]

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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.[70][71]

2005–2008: The Intel partnership

Main article: Apple Intel 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.[72] 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 1 year sooner than announced.[72] The Power Mac, iBook, and PowerBook brands were
retired during the transition; the Mac Pro, MacBook, and MacBook Pro became their respective
successors.[73][74] On April 29, 2009, The Wall Street Journal reported that Apple was building its
own team of engineers to design microchips.[75]

Apple also introduced Boot Camp to help users install Windows XP or Windows Vista on their
Intel Macs alongside Mac OS X.[76]

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.[77] 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."[78]

Although Apple's market share in computers has grown, it remains far behind competitor
Microsoft, with only about 8 percent of desktops and laptops in the U.S.[79]

Delivering his keynote at the Macworld Expo on January 9, 2007, Jobs announced that Apple
Computer, Inc. would from that point on be known as Apple Inc. The event also saw the
announcement of the iPhone and the Apple TV.[80] 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.[81]

On February 6, 2007, Apple indicated that it would sell music on the


iTunes Store without DRM (which would allow tracks to be played on

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third-party players) if record labels would agree to drop the technology.[82] 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.[83]

On July 11, 2008, Apple launched the App Store to sell third-party applications for the iPhone and
iPod Touch.[84] 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.[85] 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.[86]

On December 16, 2008, Apple announced 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.[87]

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.[88] 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

2009–2010: The Ultimate Revelation

Boy oh boy, it's been a while, hasn't it? Nearly a year! Thanks/Sorry to all those who wrote in to
ask if I was dead, and even more thanks to those of you who didn't! I'm not dead, I
haven't forgotten about or given up on the site, and I do intend to bring it up to date and
improve it over time.Now that we've gotten that out of the way: the site has been updated
with all the 2009 models, and has had some major under-the-hood renovations to
increase stability, scalability, and to aid in future feature enhancements. As proof that all
that pretty much invisible under-the-hood work was worth
something, I've added a new feature, which allows you to compare
up to four models side by side. Every model page now has a pull-
down menu listing all other models, and a "compare" button. Once
you get past the initial annoyance at the list being so darn long, it's
easy as pie! You can add a model to the comparison with the
same pull-down menu, and you can remove a model by clicking
"REMOVE." I intend, at some point, to come up with something
better than a 340-item pull down menu, but I had to get the update out before 2010. In
addition to yet another round of corrections, I've also updated a bunch of the images for
older models, thanks to the very generous folks at Old Computers (a really great

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collection of 70's and 80's computers) and Todo Apple Blog. I figure We've got a few
weeks before the site goes out of date again. Within hours of launching the comparison
feature I managed to break it in attempt to fix bookmarking (which had been broken for
comparison pages). Both work now. Happy (one month after) New Year! Added the Late
2009 models and the iPad. Made more smallish, not all that apparent under-the-hood
changes.

Products

i Pad
All of the built-in apps on iPad were designed from the ground up to take advantage of the large
Multi-Touch screen and advanced capabilities of iPad. And they work in any orientation. So you
can do things with these apps that you can’t do on any other device.

Safari

iPad is the best way to experience the web. View whole pages in
portrait or landscape on the large Multi-Touch screen. And let
your fingers do the surfing.

Mail

There’s nothing like the Mail app on iPad. With a split-screen view and expansive onscreen
keyboard, it lets you see and touch your email in ways you never could before.

Photos

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A vivid LED-backlit IPS display makes viewing photos on iPad extraordinary. Open albums with a
tap. Flip through your pictures one by one. Or play a slideshow and share your photos.

Videos

The 9.7-inch high-resolution screen makes iPad perfect for watching HD movies, TV shows,
podcasts, music videos, and more.

YouTube

With the YouTube app designed specifically for iPad, videos are even
easier to find. And on the amazing iPad display, they’re more fun to
watch. Especially in HD.

iPod

Reach out and touch your songs. View your album art full-size. iPad
makes music look as good as it sounds.

iTunes

Millions of songs, thousands of movies and TV shows, and so much more. Browsing and buying
are just a tap away.

App Store

You’ll find more than 150,000 apps on the App Store, and iPad can run
almost all of them. Including everything from games to productivity apps.

iBooks

Reading is a joy on iPad. Text looks crisp and bright. Pages turn with a flick. And you can buy
new books from the iBookstore. Just download the free iBooks app to get started.

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Maps

See more of the world with iPad. Find locations easier than ever with street view, satellite view, or
new terrain view — all using Google services.

Notes

With its large display and onscreen keyboard, iPad makes it easy to jot down quick notes and
keep important information on hand. You can even email yourself
reminders.

Calendar

Work, home, and everything in between. Your schedules are easy


to read and easy to manage on iPad — even all at once.

Contacts

With Contacts on iPad, you can see much more than just names and numbers. And you can do
more with them, too.

Home Screen

With just one press of the Home button, you have access to every app on your iPad.

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Spotlight Search

No matter what you’re looking for, Spotlight Search can help you find it.

Accessibility

Universal access is built into iPad. So right out of the box, Apple makes it easy
for people with disabilities to enjoy all that iPad has to offer.

iWork

The iWork productivity applications that you know and love on the Mac
— Keynote, Pages, and Numbers — have been completely redesigned
for iPad.2 So you can create great-looking presentations, documents,
and spreadsheets. All using just your fingers. And while they’re easy to
use, they’re also the most powerful productivity apps ever built for a
mobile device.

Keynote

Create a presentation with custom graphic styles, elegantly designed


themes, stunning animations and effects, and powerful new features
designed just for iPad.

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Pages

Pages has everything you need to put your words into beautiful documents. Including Apple-
designed templates and easy-to-use formatting tools.

Numbers

Numbers includes over 250 easy-to-use functions, an intelligent keyboard,


flexible tables, and eye-catching charts. So you can create compelling spreadsheets in just a few
taps.

i Phone

The Fastest iPhone Ever

The first thing you’ll notice about iPhone 3GS is how quickly you can launch applications. Web
pages render in a fraction of the time, and you can view email
attachments faster. Improved performance and updated 3D graphics
deliver an incredible gaming experience, too. In fact, everything you
do on iPhone 3GS is up to 2x faster and more responsive than
iPhone 3G.

Video

Now you can shoot video, edit it, and share it — all on your
iPhone 3GS. Shoot high-quality VGA video in portrait or
landscape. Trim your footage by adjusting start and end points.

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Then share your video in an email, post it to your MobileMe gallery, publish it on YouTube, or
sync it back to your Mac or PC using iTunes.

3-Megapixel Camera

The new 3-megapixel camera takes great still photos, too, thanks to built-in autofocus and a
handy new feature that lets you tap the display to focus on anything (or anyone) you want.

Voice Control

Voice Control recognizes the names in your Contacts and knows the music
on your iPod. So if you want to place a call or play a song, all you have to
do is ask.

Compass

With a built-in digital compass, iPhone 3GS can point the way. Use the
new Compass app, or watch as it automatically reorients maps to
match the direction you’re facing.1

Cut, Copy & Paste

Cut, copy, and paste words and photos, even between applications.
Copy and paste images and content from the web, too.
Learn more about Cut, Copy & Paste

Landscape Keyboard

Want more room to type on the intelligent software keyboard? Rotate iPhone to
landscape to use a larger keyboard in Mail, Messages, Notes, and Safari.

Messages

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Send messages with text, video, photos, audio, locations, and contact information. You can even
forward one or more messages to others.

Search

Find what you’re looking for across your iPhone, all from one convenient place.
Spotlight searches all your contacts, email, calendars, and notes, as well as
everything in your

Accessibility

iPhone 3GS offers accessibility features to assist users who are visually or hearing impaired.
These features include the VoiceOver screen reader, a Zoom feature, White on Black display
options, Mono Audio, and more.

Internet Tethering

Surf the web from practically anywhere. Now you can share the 3G
connection on your iPhone with your Mac notebook or PC laptop.
Tethering is not currently offered in the U.S. and some other countries. See
your carrier for availability.

Voice Memos

Capture and share a thought, a memo, a meeting, or any audio recording on


the go with the new Voice Memos application.
Nike + iPod

iPhone includes built-in Nike + iPod support. Just slip the Nike + iPod Sensor
(available separately) into your Nike+ shoe and start your workout.

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Stocks

Stocks on iPhone shows you charts, financial details, and headline news for any stock you
choose. Rotate iPhone to see even more detailed information.

YouTube

Watch YouTube videos wherever you are. Log in to your YouTube


account to save and sync bookmarks and rate your favorites.

Find My iPhone and Remote Wipe

If you misplace your iPhone, Apple’s MobileMe service can help you find it. Log on to me.com to
view a map that shows the approximate location of your iPhone. If it’s nearby, have it play an alert
sound to help you find it. If it’s not, you can display a custom message, remotely lock it with a
passcode, or initiate a remote wipe and restore it to factory settings.

i Pod
With 160GB, you can carry your entire media library with you everywhere.

Meet a musical Genius.

Say you’re listening to a song you really like and want to hear other tracks
that go great with it. With a few clicks, the Genius feature finds other songs
on your iPod classic that sound great with the one you're listening to, then
makes a Genius playlist for you. Or get even more sets of customized
songs when you use the new Genius Mixes feature in iTunes. Just sync your iPod classic to
iTunes, and Genius automatically searches your library to create perfect mixes you'll love.

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Hold everything.

iPod classic gives you 160GB of storage capacity, good for up to 40,000
songs, 200 hours of video, 25,000 photos, or any combination. And you get up
to 36 hours of battery life, so you can keep on rocking for a long, long time.

Finding exactly what you want to watch or listen to is easy. Use the Click
Wheel to browse by album art with Cover Flow or navigate your songs and
videos by playlist, artist, album, genre, and more. You can also search for specific titles and
artists. Want to mix things up? Click Shuffle Songs for a different experience every time.

Leave no tune behind.

With 160GB of space, iPod classic means you can always have your entire music and movie
library with you.2 Carry it from the living room to a party in the backyard. Or take it on a cross-
country road trip and never listen to the same song twice.

Watch movies and TV shows.

The vivid 2.5-inch display makes video come alive. Purchase or rent movies,
buy TV shows, and download video podcasts from the iTunes Store, then
sync them to your iPod classic to watch anywhere, anytime.

Play iPod games.

Put hours of fun at your fingertips. iPod classic comes with three games —
Vortex, iQuiz, and Klondike — and you can purchase games such as Cake
Mania from the iTunes Store. All iPod games are designed specifically for the
iPod interface.

Share your photos.

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iPod classic uses iTunes to sync the photos you have in iPhoto on a Mac. You can view photo
slideshows complete with music and transitions on iPod classic, or play them on a TV using an
optional Apple component or composite AV cable.

i Mac

LED backlighting. One bright idea.

Full brightness with no waiting. That’s the big advantage of the LED-backlit iMac display. Unlike
most displays that take time to warm up before they reach maximum brightness, an LED-backlit
display is instantly on and uniformly bright. LED backlighting also gives you greater control over
screen brightness. So you can finely tune the iMac
display to suit the ambient light in even the dimmest
room.

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More pixels. Better picture.

The new iMac offers some prime pixel real estate. The 21.5-inch, 1920-by-1080 display has 17
percent more pixels than the previous 20-inch iMac. The 27-inch, 2560-by-1440 display has a
whopping 78 percent more pixels than the 21.5-inch iMac. And a 1000:1 contrast ratio gives you
more vibrant colors and blacker blacks. All that in a widescreen display with a 16:9 aspect ratio —
the same as an HD TV.

Stunning from every angle.

The new iMac display looks great from any seat in the house, thanks to a premium display
technology called in-plane switching (IPS). IPS gives you a bright picture with excellent color
consistency — even if you’re viewing the display from the side.

Now available with quad-core power.

The 21.5-inch and 27-inch iMac models offer fast Intel Core 2 Duo processors up to 3.33GHz.
Quad-core power comes to the 27-inch iMac with a 2.66GHz Intel Core i5 processor or 2.8GHz
Intel Core i7 processor. Four cores deliver up to 2x faster performance for just about everything
you do: managing your photos, editing HD video, even playing graphics-intensive 3D games.¹
And since Mac OS X Snow Leopard is designed to take full advantage of Intel dual- and quad-
core architectures, you get the fastest performance possible.

Revved-up graphics.

Every iMac comes with high-performance graphics that make games run smoother, photos load
faster, and pro applications work better. If you want even speedier graphics, choose an iMac with
a more advanced ATI graphics processor. Learn more about iMac performance

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More memory and storage.

The new iMac has 4GB of 1066MHz DDR3 memory standard,


with room in its four SO-DIMM slots for up to 16GB, so you can
run more applications simultaneously. And with a Serial ATA
hard drive up to 2TB,² feel free to load up on photos, videos, and
music.

Built-in Wi-Fi.

High-speed 802.11n wireless technology is built into iMac. And


with Time Capsule or the AirPort Express Base Station, every computer in every room can
wirelessly connect to iMac, the Internet, and each other.³ Over this network, everyone can print,
surf the web, and play music on iTunes through your home stereo — wirelessly.

Wireless keyboard.

iMac banishes desktop clutter completely with a wireless keyboard to go with the wireless Magic
Mouse. This low-profile keyboard takes up less desk space — 24 percent less — than larger
keyboards. There’s no numeric keypad, so you can place your mouse comfortably next to the
keyboard. And built-in Bluetooth wireless technology means there are no cables to connect

Wireless Magic Mouse.

Forget the mouse as you know it. Every iMac comes with the wireless
Magic Mouse: the world’s first Multi-Touch mouse. Use it once and
you’ll wonder how you ever used anything else. There’s no scroll ball,
no clunky wheel, no cord, and no visible button.

Instead, Magic Mouse uses Multi-Touch technology to let you control everything with simple
gestures. Give them a try and you’ll find that Magic Mouse changes the way you interact with
your computer. Built-in software lets you configure Magic Mouse any way you want. Its smooth,

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seamless design is ambidextrous, and it supports two-button clicking — without buttons. Like
magic.

iSight camera.

Look closely: Hidden behind the glass display at the top of iMac is an iSight camera. Use it with
iChat, and you can be anywhere without actually being there. Video chat with up to three of your
friends, share a video with a colleague, or present to a client.4 Use iSight with Photo Booth for fun
photo effects. And there’s no need to waste valuable primping time installing software or
configuring the camera. Like everything Mac, iSight just works.

Mini DisplayPort.

The Mini DisplayPort lets you connect an external display, including the Apple LED Cinema
Display, to your iMac. On the 27-inch iMac, the same port offers input, too. So you can connect
any external source that has DisplayPort output — including a MacBook or MacBook Pro — and
use your iMac as a display.

Wall mountable.

It’s easy to give your iMac a place of honor on the wall. The 27-inch iMac is compatible with the
VESA Mount Adapter Kit for use with wall mounts and articulating arms.

SD card slot.

Transfer your photos and videos to and from your iMac just as fast as you’re able to take them.
The new iMac has an SD card slot built in. Just insert your camera’s memory card and import
your photos to iPhoto. From there, it’s easy to organize your photos by the people in them, share
them online, or create photo books.

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USB and FireWire.

Bring on your iPod, digital camera, mobile phone, and external hard drive. If it has a cable, iMac
has a port for it. Four USB 2.0 ports and a FireWire 800 port give you plenty of peripheral
possibilities.

MacBook Pro
Aluminum unibody enclosure, advanced longer-lasting battery, enhanced LED-backlit display.
MacBook Pro has been precision engineered down to the smallest detail.

Precision aluminum. The new gold standard.

Carved from a single block of aluminum, the


MacBook Pro is a true engineering achievement. Its
unibody enclosure is the product of precise
machining. From the thumbscoop to the
now-you-see-it-now-you-don’t sleep indicator light,
no detail is unaccounted for. The end result is a

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notebook that’s not only breakthrough, but thin, light, polished, and refined. The unibody also
makes MacBook Pro more durable than ever. So you can throw it in your briefcase or messenger
bag and pull it out at an airport, at school, at the office, or on location without a second thought

The longest-lasting Mac notebook battery ever.

Built right into each of the new MacBook Pro notebooks is a breakthrough battery that lasts
dramatically longer and does so without increasing the size or weight of MacBook Pro. On a
single charge, the battery in the new MacBook Pro lasts up to 7 hours (8 hours on the 17-inch
MacBook Pro)1 and can be recharged up to 1000 times.2 That’s compared with only 200 to 300
times for typical notebooks. Advanced chemistry and Adaptive Charging allows the battery to
maintain charging capabilities longer and determines the optimal way to charge the battery’s
cells. Because the battery lasts up to five years, MacBook Pro uses just one battery in the same
time a typical notebook uses three. That makes for less waste. And that, in turn, makes for one
environmentally friendly battery. Learn more about the battery

Breakthrough Battery

A built-in battery powers MacBook Pro for up to 7 to 8 hours on a single charge. Watch the video

Graphics in full force.

The MacBook Pro reaches a new level of high-speed, high-end


game-playing power. Not to mention pure performance for graphics-intensive applications like
Aperture and Motion. The power-saving NVIDIA GeForce 9400M integrated graphics processor
inside every MacBook Pro is great for everyday performance, while delivering long battery life.
The 17-inch MacBook Pro and select 15-inch models include the NVIDIA GeForce 9600M GT
discrete graphics processor, providing you with turbocharged performance for the most
graphically intensive tasks.

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A display of brilliance.

The moment you open your new MacBook Pro you’re greeted by glorious, full screen brightness.
But that’s only one gleaming quality of the glossy LED-backlit widescreen display. It offers a 60
percent greater color gamut than previous generations for richer, more vibrant colors. And
anything you view — including the ultrathin display itself — is a spectacular experience. The
seamless glass enclosure makes this display strong and durable. And the display is power
efficient and mercury- and arsenic-free, so it’s greener than ever.

Even the keyboard is advanced.

The rigid aluminum keyboard webbing has been cut precisely to hold the keys. And the keys are
curved to perfectly fit fingers. The result? Pure typing bliss. The keyboard is also illuminated, so
when you’re in low-light settings, such as airplanes or conference rooms, you can always see
what you’re typing.

Backlit Keyboard

An ambient light sensor activates the illuminated keyboard in low-light conditions. See it in action

It all just clicks.

The first thing you might notice — or not notice — is the button. The entire trackpad is the button,
so you can click anywhere. Without a separate button, the spacious trackpad gives your hands
plenty of room to move on the large, silky glass surface. Use two fingers to scroll up and down a
page. Pinch to zoom in and out. Rotate an image with your fingertips. Swipe with three fingers to
flip through your photo libraries. Swipe with four fingers to show your desktop, view all open
windows, or switch applications. If you’re coming from a right-click world, you can right-click with

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two fingers or configure a right-click area on the trackpad. The more you use the Multi-Touch
trackpad, the more you’ll wonder what you ever did without it

Everything fits.

Each MacBook Pro comes standard with a large hard drive with up to 500GB of storage
capacity,3 so there’s plenty of room for your photo libraries, video projects, and files. Or you can
choose a 128GB or 256GB solid-state drive, which has no moving parts for enhanced durability.
MacBook Pro also features ample high-speed 1066MHz DDR3 memory, with support for up to
8GB of RAM, so you can run more applications at once and quickly access your data and media.
Configure your MacBook Pro now at the Apple Online Store

Think fast.

Inside the 13-inch MacBook Pro is a fast Intel Core 2 Duo processor running at up to 2.53GHz,
with the 15- and 17-inch MacBook Pro reaching speeds up to 3.06GHz. The processor is based
on groundbreaking 45-nm process technology and advanced Core microarchitecture. With the
1066MHz frontside bus and 3MB of shared L2 cache (up to 6MB for the 15- and 17-inch models),
MacBook Pro runs applications faster and more efficiently than ever before.

Ports with possibilities.

Every MacBook Pro is iPod, iPhone, digital camera, and external hard drive ready. If it has a
cable, there’s a place for it. You’ll find two USB 2.0 ports (three USB 2.0 ports on the 17-inch
MacBook Pro) and a FireWire 800 port for connecting faster peripherals. The Mini DisplayPort is
a perfect fit for the Apple LED Cinema Display. MacBook Pro even recognizes what you plug in,
so you don’t have to install new drivers.

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From camera to computer, In an instant.

Transfer your photos and videos to and from your MacBook Pro just as fast as you’re able to take
them. Built into the 13- and 15-inch MacBook Pro is a new SD card slot, so you can edit and
share your photos and digital video on the spot.

Your studio to go.

With the latest 802.11n wireless technology built into MacBook


Pro, you’re always seamlessly and effortlessly connected to the wireless world out there, at
home, and at work.4 MacBook Pro automatically finds available networks and allows you to join
them with just one click. Bluetooth wireless technology is also built in, so brilliant accessories can
become your wireless accomplices. With a built-in battery that lasts longer than ever before, you
can do everything you need to do, where you need to do it.

Burn DVDs superfast.

After editing and applying the finishing touches to your home movie masterpiece in iMovie and
iDVD, use the ultrafast 8x SuperDrive on your MacBook Pro to burn it to DVD. And because the
SuperDrive also writes to double-layer discs (DVDs with nearly 9GB of space), it’s great for
backing up data

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Ports with possibilities.

Every MacBook Pro is iPod, iPhone, digital camera, and external hard drive ready. If it has a
cable, there’s a place for it. You’ll find two USB 2.0 ports (three USB 2.0 ports on the 17-inch
MacBook Pro) and a FireWire 800 port for connecting faster peripherals. The Mini DisplayPort is
a perfect fit for the Apple LED Cinema Display. MacBook Pro even recognizes what you plug in,
so you don’t have to install new drivers.

From camera to computer, In an instant.

Transfer your photos and videos to and from your MacBook Pro just as fast as you’re able to take
them. Built into the 13- and 15-inch MacBook Pro is a new SD card slot, so you can edit and
share your photos and digital video on the spot.

Your studio to go.

With the latest 802.11n wireless technology built into MacBook Pro, you’re always seamlessly
and effortlessly connected to the wireless world out there, at home, and at work. 4 MacBook Pro
automatically finds available networks and allows you to join them with just one click. Bluetooth
wireless technology is also built in, so brilliant accessories can become your wireless
accomplices. With a built-in battery that lasts longer than ever before, you can do everything you
need to do, where you need to do it.

32
i Tune
iTunes is a free application for your Mac or PC. It organizes and plays your digital music and
video on your computer. It syncs all your media with your iPod, iPhone, and Apple TV. And it’s a
store on your computer, iPod touch, iPhone, and Apple TV that has everything you need to be
entertained. Anywhere. Anytime.

iTunes Player

Where listening, watching, and playing start.

iTunes lets you enjoy all your music, movies, video, and TV shows
on your Mac or PC. When you want to watch or listen to
something, you no longer have to look through your CDs or flip
through channels — just go to your computer and open iTunes.
With your entire media collection in your iTunes library, you can
browse everything faster, organize it all easier, and play anything
whenever the mood strikes. Learn more about the iTunes Player

iTunes Store

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The world’s #1 music store. And more.

What makes the iTunes Store such a hit? Over 11 million high-quality, DRM-free songs priced at
just 69¢, 99¢, or $1.29 each. Visit the iTunes Store on your computer, iPhone, iPod touch, or
Apple TV. Browse around and have a listen. Preview a song before you buy it and get
recommendations based on music you love. And that’s just music.

You can also rent or buy blockbuster movies, get HD episodes of your favorite TV shows, shop
for audiobooks, and download apps for your iPhone or iPod touch. Subscribe to free podcasts
about anything and everything. For further enlightenment, visit iTunes U and download free
lectures, discussions, and lessons from universities and cultural institutions around the globe.
You’ll find thousands of hours of entertainment on the iTunes Store. Learn more about the iTunes
Store

iTunes Everywhere

It all goes where you go

How do you get your music and movies from your Mac or PC to your
iPhone or iPod? iTunes does it for you. How about photos, contacts,
and calendars? iTunes transfers them, too. iTunes makes it
surprisingly easy to sync media from your computer to your iPod and
the other way around. Shop the iTunes Store directly from your
iPhone or iPod touch. You can download music, movies, and TV shows anywhere you are over a
Wi-Fi network. When you’re back at your computer, connect your iPhone or iPod touch. iTunes
syncs what you bought on the road to your iTunes library. iTunes also wirelessly syncs your
iTunes library to your Apple TV, so you can see your movies, listen to your music, and look at
your photos.

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Marketing Strategy
Apple Inc. uses the Apple brand to compete across several highly competitive markets, including
the personal computer industry with its Macintosh line of computers and related software,
the consumer electronics industry with products such as the iPod, digital music distribution
through its iTunes Music Store, and more recently in the smart phone market with the
Apple iPhone.

Apple's product strategy is to create innovative products and services aligned with a "digital hub"
strategy, whereby Apple Macintosh computer products function as the digital hub for digital
devices, including the Apple iPod, personal digital assistants, cellular phones, digital video
and still cameras, and other electronic devices.

The Apple Brand Personality

Apple has a branding strategy that focuses on the emotions. The Apple brand personality is about
lifestyle; imagination; liberty regained; innovation; passion; hopes, dreams and aspirations; and
power-to-the-people through technology. The Apple brand personality is also about simplicity and
the removal of complexity from people's lives; people-driven product design; and about being a
really humanistic company with a heartfelt connection with its customers.

Apple Brand Equity and Apple's Customer Franchise

The Apple brand is not just intimate with its customers, it's loved, and there is a real sense of
community among users of its main product lines.

The brand equity and customer franchise which Apple embodies is extremely strong. The
preference for Apple products amongst the "Mac community", for instance, not only kept the
company alive for much of the 90's (when from a rational economic perspective it looked like a

35
dead duck) but it even enables the company to sustain pricing that is at a premium to its
competitors.

It is arguable that without the price-premium which the Apple brand sustains in many product
areas, the company would have exited the personal computer business several years ago. Small
market share PC vendors with weaker brand equity have struggled to compete with the supply
chain and manufacturing economics of Dell. Apple has made big advances in becoming more
efficient, particularly in logistics and operations, but would still find it difficult to make a profit at the
price levels Dell transacts at.

The Apple Customer Experience

The huge promise of the Apple brand, of course presents Apple with an enormous challenge to
live up to. The innovative, beautifully-designed, highly ergonomic, and technology-leading
products which Apple delivers are not only designed to match the brand promise, but are
fundamental to keeping it.

Apple fully understands that all aspects of the customer experience are important and that all
brand touch-points must reinforce the Apple brand.

Apple is expanding and improving its distribution capabilities by opening its own retail stores in
key cities around the world in up-market, quality shopping venues. Apple provides Apple Mac-
expert retail floor staff staff to selected resellers' stores (such as Australian department store
David Jones); it has entered into strategic alliances with other companies to co-brand or distribute
Apple's products and services (for example, HP who was selling a co-branded form of iPod and
pre-loading iTunes onto consumer PCs and laptops). Apple has also increased the accessibility
of iPods through various resellers that do not currently carry Apple Macintosh systems (such as
Harvey Norman), and has increased the reach of its online stores.

The very successful Apple retail stores give prospective customers direct experience of Apple's
brand values. Apple Store visitors experience a stimulating, no-pressure environment where they
can discover more about the Apple family, try out the company's products, and get practical help
on Apple products at the shops' Guru Bars. Apple retail staff are helpful, informative, and let their
enthusiasm show without being brash or pushy.

The overall feeling is one of inclusiveness by a community that really understands what good
technology should look and feel like - and how it should fit into people's lives.

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Apple Brand Architecture

From a brand architecture viewpoint, the company maintains a "monolithic" brand identity -
everything being associated with the Apple name, even when investing strongly in the Apple iPod
and Apple iTunes products.

Apple's current line-up of product families includes not just the iPod and iTunes, but iMac, iBook,
iLife, iWork, and now iPhone. However, even though marketing investments around iPod are
substantial, Apple has not established an "i" brand. While the "i" prefix is used only for consumer
products, it is not used for a large number of Apple's consumer products (eg Mac mini, MacBook,
Apple TV, Airport Extreme, Safari, QuickTime, and Mighty Mouse).

The list of Apple's Trademarks reflects something of a jumbled past. The predominant sub-brand
since the introduction of the Apple Macintosh in January 1984 has always been the Apple Mac.
Products whose market includes Microsoft computer users (for example MobileMe, QuickTime,
Bonjour, and Safari) have been named so they are somewhat neutral, and therefore more
acceptable to Windows users. Yet other product have been developed more for a professional
market (eg Aperture, the Final Cut family, and Xserve).

The iPod Halo Effect

Though Apple's iPhone and iTunes music business is profitable in its own right, Apple's venture
into these product areas was based on a strategy of using the music business to help boost the
appeal of Apple's computing business.

Apple is using iPod, iTunes, and now iPhone to reinforce and re-invigorate the Apple brand
personality. At the same time, these product initiatives are growing a highly relevant, appealing
brand image in the minds of consumer segments that Apple has not previously reached.

In a so-called iPod halo effect, Apple hoped that the popularity of iPod and iTunes among these
new groups of customers would cause these segments to be interested in Apple's computer
products. This does seem to have happened. Since the take-off of the iPod there has been a
dramatic rise in Apple's computer sales and market share.

A couple of years ago, Apple's aspirations for the iPod halo effect was was highlighted most
strongly when it used the slogan "from the creators of iPod" in its promotion of iMac G5
computers. In this instance, the Apple brand came full-circle - having been built into a branding

37
system that originates in the personal computer market, then leveraged into the consumer
electronics market, and then back into the consumer personal computer market.

Apple Brand Strength Now Creating Financial Success

So far, Apples' branding strategy is bearing fruit. For example, Apple reports that half of all
computer sales through its retail channel are to people new to Macintosh, the company's sales
and margins have been growing strongly since 2006, and Apple has achieved several "best ever"
quarterly financial results during the past couple of years.

Leveraging the success of the iPod, Apple launched the iPhone (released in July 07) to extend
the brand even further. Apple's buzz marketing efforts in the first half of 2007 were truly superb,
culminating in the release of one of the most highly anticipated products for many years - and
launching apple into a completely new market: mobile handsets. By July 2008 the buzz about the
3G iPhone resulted in over 1 million units being sold in the first 3 days of its release in over 20
countries around the world.

Apple Re-entering the Corporate Market via the iPhone Halo

Though no-one at Apple would say so today, the next phase of Apple's strategy seems focused
on the Corporate marketplace.

A long time ago, Apple had a fairly strong market share in large companies.

A long, long time ago (at the end of the 1970's) the first spreadsheet program (VisiCalc) was
launched on the Apple II. The first PC (the IBM PC) to run a Microsoft operating system (PC
DOS) did not appear until 1981. When Microsoft launched its Excel spreadsheet in 1984 it
appeared first on the just-released Apple Mac, such was Apple's presence among accounting
and finance departments.

Even though Apple effectively stopped competing for corporate business during the 1990s, the
Apple Mac is still used in some corporate environments. Microsoft still has a vigorous applications
development team totally dedicated to writing business software for the Apple Mac. New versions
of Microsoft Office for Apple Mac still come out approximately 2 years before similar functionality
is placed in the next version of Microsoft Office for the Windows operating system.

Over the next few years it seems likely that Apple will re-focus on the Corporate marketplace:
Apple has announced that "Snow Leopard" (the next version of the Apple Mac operating system,
due in 2009) will include features allowing Mac computers to fully support Microsoft Exchange.

38
This will enable corporate IT departments to support business users who wish to use Apple Macs
for their main email clients.

Also, Microsoft continues to bring out advanced versions of Microsoft Office for Apple Mac, and -
very significantly - in mid-2008 Apple announced a software upgrade for the iPhone which allows
iPhones to be fully supported by Microsoft Exchange email servers. Corporate IT departments
can now include iPhones as email clients.

Apple's strategy seems clear: to use the popularity of the iPhone to break back into large
corporations, and ultimately have Apple Macs on the desks of large businesses (or more probably
- in the laptop bags of middle and senior managers in most large businesses. The Macbook Air is
also clearly aimed at this type of market).

As we say; no one in Apple will currently admit to such ambitions, but this is clearly where Apple's
branding strategy is headed.

Apple's Original Apple Macintosh Marketing Strategy

Stanford University has published contemporary records and original documents of the marketing
strategy for the Apple Macintosh launch in 1984, including the original Apple marketing strategy
and the Apple Macintosh product introduction plan written by Regis McKenna.

It is now 25 years since the launch of the Apple Macintosh (on January 24, 1984). Having proven
itself and already gained considerable popularity with the Apple II, Apple chose to announce the
Apple Mac in one of the most famous-ever commercials, aired during the third quarter of Super
Bowl XVIII on 22 January 1984.

Apple has been so successful in these last years thanks to his fresh, imaginative way to think and
do its business: a winning combination of exceptional products, great style and design, great
strategy, innovative marketing, sleek and enticing communications.

Apple owes its overwhelming success in the last years to the iPhone and to the smart iPod and
iTunes product combination, a combination of a great hardware piece with great style, great
software, great performance, user friendly interface, with a good e-business service. The iPod +
iTunes halo effect and new great Mac computers and Mac OS software did the rest in increasing
Apple revenue stream.

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In the 5 years between 2003 to 2008 the Apple share value increased 25 times, from $7.5 to
$180 per share. At July 2008 prices, before the US Financial Crisis, Apple stock market
capitalization was $160 billion.
In January 2010 Apple shares topped the $210 mark.
But even the best companies with the best products have bottleneck factors which often avoid full
exploitation of the opportunities.

The iPad

Steve Jobs claims the iPad gives the best way to experience the web.
Yet, the iPad does not have Flash Player, Flash is essential on the web and is used everywhere.
Surfing the Web without Flash gives you big empty boxes in the middle of a page. Video on the
web is mostly implemented in Flash. No Flash, no video.
So, what Steve Jobs says is untrue. Actually the iPad gives one of the worst web experiences
you can imagine.
Besides, the iPad does not have USB ports.

The iPod

Few people are aware - and few market analysts too - that for the first 3 years the iPod was an
absolute flop. The iPod was launched in october 2001, and between 2001 and 2004 iPod sales
were between 100-200 thousand units per quarter, very far from today's 10-20 million units per
quarter, and the iPod sales were not even covering the product research & development costs.
Then, in June-Aug 2004 something happened, and iPod sales began to grow strongly, quarter
after quarter. Today, we all know where the iPod stands, and what a remarkable success it is.
The iPod made the fortune of Apple, and it stands out as the major turning point in the company
growth.

iPod + iTunes

Few people know that the iPod + iTunes business idea was not conceived inside Apple, but was
proposed to Apple by an outside source, a music lover and Engineer named Tony Fadell. The
iPod marks another outstanding result in marketing: the annihilation of competitors. To know
more see the analysis on
The iPod competitors It should be noted that, since the second generation of iPods in 2002, the
iPods were made compatible not only with the Mac operating systems but with Microsoft

40
Windows operating systems as well. We should ask ourselves (and to Steve Jobs): how many
iPods would have been sold if the iPods would had been compatible only with Mac operating
systems?
Where the iPod is manufactured and assembled

The iPhone

The pipeline of new products which came out from Apple in the last years is impressive, and
overwhelming. In 2007, with the successful launch of the iPhone, Apple has marked another
milestone in its development and growth. And moreover, the iPhone enters a market - the market
of mobile phones - a market which is mature, and saturated. Nonetheless, Apple has been able to
develop a revolutionary product, and to change the paradigm in the mobile phone market. The
iPhone is 5 years ahead of all its competitors. A wonderful product, amazing user interface, great
design. It is not only a mobile phone, it is a product between a mobile phone and a laptop
computer. Even calling it a smartphone is not enough.

The iPhone 3GS

In June 2009 Apple launched its third generation iPhone: the iPhone 3GS. The iPhone 3GS has a
3 megapixel autofocus camera, video recording and editing capabilities, voice control, longer
battery life, 7.2 Mbps HSDPA internet connection. iPhone 3GS is twice faster than the iPhone 3G.
The iPhone 3GS prices: $199 for the 16GB model, $299 for the 32GB model. More on the new
iPhone 3GS on the iPhone 3GS page. More on iPhone Marketing on the iPhone Marketing
Strategy page. Apple did great. no doubt. However Apple has done some serious mistakes.

The most serious mistakes Apple has done concern marketing and distribution strategies in
Europe.
Apple has overlooked the European markets, and missing big numbers in unexploited sales. With
better marketing strategy, better communication and distribution, Apple could have made 300%
more revenues in Europe in the last 4 years. Apple Marketing in Europe We met with with Erik
Stannow, Apple Vice President of Marketing for Europe & EMEA. We have been talking with Erik
Stannow about the marketing and distribution issues of Apple in the European markets and we
gave some valuable suggestions to improve the Apple marketing strategy and distribution in
Europe. Well, it seems that in Cupertino they don't care so much about Europe.

Steve Jobs

41
If we talk about Apple success, about Apple great products, we need to talk about Steve Jobs.
Steve Jobs has been and is the great mind behind all this.
Steve Jobs is a genius, he is a magician, too. He is the most skilled guy in introducing new
products - "... one more thing" - the most skilled in presenting the key features, and he is a great
communicator. Even more important, Steve Jobs has Vision. Vision in the strategy, Vision in the
product development, Vision in the alliances.

Apple Communication Strategy

Apple communication is sober, intriguing, simple, clear, minimalist and clever. And it has a style
of its own. Both in the tv ads, both in print ads, both in the online communications. A lesson to be
learned by many companies in the world. Well, of course when you have great products it is
much easier to entice the costumers, but nevertheless doing it with style and cleverness is a very
good point. It boosts sales, but enhances the brand value too.The famous "I am a Mac, I am a
PC" tv ads are a milestone in communications. Smart, simple, effective and humiliating (for
Microsoft ...).

The Who Video

The Who video playing at the top of the page is "Pinball Wizard", from the Dvd "The Who - Live at
the Isle of Wight" is an historical video filmed at the Isle of Wight Music Festival in 1970. We
encourage every rock music lover to purchase this wonderful Dvd: in the Dvd the Who play My
Generation, Magic Bus and an ample selection from the Rock opera "Tommy" it's a masterpiece
in the history of Rock. You can find it on Amazon.com.

Copyright Notice

Apple Video excerpts and Apple products images courtesy of Apple Inc. The Apple logo is a
trademark of Apple Inc. here used for illustration only. Jean Genie song written by David Bowie is
played by Too Many Monkeys. The Who video copyright © 1996 Pulsar Productions Inc. The
short Who video is included in this page with the purpose of promoting the great music of the
Who and to spread the knowledge of the Dvd "The Who Live at the Isle of Wight". In case the
copyright owners of the Who video would rather prefer not to have that video on this page, please
let us know by writing a message on our contact page and we shall promptly withdraw it.

42
Pricing Strategy
"Good marketers don't
lead with price."

-- Carl Howe

Apple is a premium brand of computer. Apple doesn't try to compete with PCs directly on price for
several reasons that are well known. Cut throat pricing leads to diminished profits and loss of
shareholder value. It diminishes the hard won reputation of the Apple brand. Finally, it's too early
for Apple to jump on price decreases before it fully understands the the impact of the Jan-Mar
quarter sales.

Another reason is that dropping prices for a premium brand has to take into account Apple's
experience with the price elasticity of its products. Price elasticity is defined as the response in
demand for a product as the price decreases. For example, if Apple were to drop the price of the
low end Mac mini from US$599 to, say, $399, would the demand increase so much that the new
production rate would lower costs and make more money for Apple? Or would the price reduction
simply reduce Apple's earnings? Based on what we've seen from Apple lately, the answer has to
be the latter.

I suspect that Apple has some fairly sound computer models that suggest what the impact would
be of various price reductions. To put it euphemistically. Tim Cook, Apple's COO, has a sharp
pencil and a sharp mind. He knows, to the penny, the bill of materials for each Apple product,
what the new cost would be based on an increased order, and how his gross margins would be
affected.

Recession Realities

43
It's a fact of life that people who are concerned about getting laid off tend to avoid premium
products. That said, Apple still has to ask itself some hard questions about what the impact of
lowering prices would be on the company. Eventually, the U.S. and the rest of the world will climb
out of this economic mess. How would customers react in the future to Apple raising prices back
to original levels? (I remember the outcry when Apple actually raised memory prices a few years
ago. One would think Apple ran over a grandma, on crutches, in the parking lot.)

Does Apple have enough cash assets to weather a 10 percent drop in sales in order to preserve
its premium brand for the future? (The answer is yes.) History has shown that Apple appeals to
prosperous customers, so will a 9 or 10 percent unemployment rate affect a company that only
has 10 percent of the total market share of computers in the U.S.? And 3.5 percent worldwide?
Will the current mental state of of American consumers drive sales down dramatically or just a bit.
Apple is watching and evaluating.

When observers of the Apple scene suggest that Apple sell a $500 netbook or lower the prices of
their notebooks drastically, it seems more like a knee-jerk reaction and wish fulfillment for a
"cheaper" Mac than a considered judgment about all the factors I've mentioned above.

Contrasting Apple to Car Companies

A lot of people like to contrast Apple to the American car companies. They wonder what GM or
Chrysler would be like if Steve Jobs were the CEO. The reason we're titillated by that prospect is
because we intuitively know that the American car companies have operated like Apple under
Messrs. Spindler and, to a lesser extent Amelio.

Before Steve Jobs came back to Apple, it was a needy company. It gave away money and
computers. It spent lavishly on the Apple Masters program, essentially a bribe to famous people
to encourage them to love their Macs and show it. Apple execs stuffed the reseller channel in the
vain (and criminal) hope that lots of Macs shipped would substitute for lots of Macs purchased by
customers. Many of its products were mediocre and the selection was confusing. (But not my
beloved Power Mac 8500!)

If we look at the Detroit auto makers, we see similar things. Rebates essentially bribe customers
into buying mediocre products. Also, there are lots of products being built but few great products
that cause people to stand in line at oh-dark-thirty to buy them. While Toyota invested heavily in
hybrid technology, because they knew that offering cutting edge and responsible products would
some day pay off, GM was patting itself on the back over Hummer sales. No one really gets
excited about Buicks, but show me someone who doesn't drool over a BMW. That isn't crass

44
thinking, rather, it's just a common sense recognition of the spectrum of quality in products -- an
enduring fact.

Basic Human Psychology

Part of the psychology here, by Apple, is that if something is just a little bit out of the buyer's price
range, it's desirable. At some point, a dream will come true (or an income tax refund check
arrives) and the dream can be fulfilled.

I've handled a few netbooks at Microcenter in Denver, and, believe me, these computers are
nothing to drool over. They're work horses for someone who needs a computer to take on travel
for surfing, twitter, chat and e-mail. That's it. They do the job nicely.

But when people use low end stuff for a living, its likely that their only available rationalization is
how little they spent. Similarly, ask any IT manager about how proud he is about how little money
he spent on the computers he bought for his staff. It's a comfortable conceit. Apple knows all
about it. These people are not its customers. Should Apple gamble that they should be?

Basically, Apple, as a business, has to make a considered judgment about its own best interests,
both now and in the future. Pleas by customers for Apple to give them gifts aren't typically part of
the equation.

Recession Proof

Apple is definitely not recession proof. The collective consciousness of the country, even though
about 91 percent of people are still working, is in the dumpers. Each day brings bad news, and
Apple sales will be down this quarter. They may be down for a few quarters. Even so, Apple has
the luxury, by virtue of its assets, to avoid a hasty, emotional decision. Peter Oppenheimer,
Apple's CFO, has suggested this during the last few earnings reports.

Also, analyst perceptions about how well positioned people are to actually buy Apple products
affects their valuation of Apple stock. So despite great products, if fewer people can afford them,
then Apple's viability as a company is affected. The question for Apple, however, is deeper. Does
lowering prices increase revenues? Does it portend profits that encourage investment? Again,
from what we've seen, Apple may not believe that right now.

How far would Apple sales have to drop before Apple needed to take drastic action? What would
that action be if Apple sales fell by 50 percent, like the U.S. car companies in February? Macs at
50 percent discounts? Not with gross margins of only 31 percent. On top of that, no business

45
cause and effect is linear, so an X percent drop in sales doesn't instantly dictate an X percent
drop in price. It's that elasticity issue again. Finally, can a company with US$28 billion in cash
and short term investments weather a more probable 10 or even 20 percent slide in sales for a
few quarters without damaging its brand? I think the answer is yes, and I think Apple is betting on
just that based on the pricing of the latest iMac, Mac mini and Mac Pro updates

Apple’s iPhone Pricing Strategy


Introduced in June 2007 at a top price of $599 in the United States, the iPhone was one of the
most anticipated electronic devices of the decade. Despite its high price, consumers across the
country stood in long lines to buy the iPhone on the first day of sales. Just two months later,
Apple discontinued the less-expensive $499 model and cut the price of the premium version from
$599 to $399.

Target Group

A study conducted by Rubicon (2008) on iPhone users indicates that 50% of the surveyed users
are age 30 or younger. Most of the users described themselves as technologically sophisticated.
In general, iPhone users were over represented in the occupations that are usually early adopters
of technology: professional and scientific users, arts and entertainment, and the information
industry.

Moreover, the iPhone user base consists mainly of young early adopters: about 75% of whom are
previous Apple customers. Now, the challenge for Apple is to get their product beyond the
youthful technophiles and into the hands of mainstream users in order to maintain sustained
growth. While the early adopters are a great group for launching a product, without mainstream

46
use, the early success would not be lasting. This is why Apple has decided to use different pricing
strategies such as the skimming and versioning.

Skimming

Skimming is referred to as selling a product at a high price; basically companies sacrificing sales
to gain high profits. This is employed by companies in order to reimburse their cost of investment
put into the original research of the product. This strategy is often used to target early users of a
product/service because they are relatively less price sensitive than others. Early users are
targeted either because their need for the product is more than others or they understand the
value of the product better than others. In any case, this strategy is employed only for a limited
period of time as a way to recover most of the investment of a product. According to Köehler
(1996), the skimming price strategy is a high price strategy which provides a healthy margin but
risks a depressed sales volume. Since high prices also attract piracy, protection costs against
piracy basically eat up margins. In the case of Apple, the buyers are not attracted by pirated
versions of products because of the image of the brand linked to the snobbism of the “members
of the Apple family”. In the graph below, we compared iPod sales with the price of iPod classic
from 2002 to 2006. According to the data, the iPod classic model seemed to have either reduced
its price or maintained the same price from one year to the next. In 2002, iPod classic price was
the highest; as a result, it was also shown as the year with the lowest sales. For example, the
Apple iPod classic costs over the years include: 399$ (2002), 299$ (2003), 299$ (2004) and 249$
(2005).

Foremost, while issuing new generation model of a classic iPod, the company was still selling the
previous version at the reduced price. The skimming pricing strategy is presented at two levels.
First, the price of the same model is diminishing with time, especially when Apple is issuing the
newest version of the iPod. Second, the price of every next generation model launched on the
market is less expensive than its predecessor, which is illustrated by the above graph.Here, we

47
took the prices of the iPod classic but the same results can be seen with the iPod mini (the
launching price in 2004 was 249$ while the newest version launched in 2005 cost 199$) and the
iPod nano. To gain market share, a seller cannot solemnly rely on skimming strategies but must
also use other pricing tactics such as pricing discrimination, which has been the case of Apple.

Versioning (Pricing discrimination)

Pricing discrimination is a pricing strategy that charges customers difference prices for the same
product or service. In pure price discrimination, the seller will charge each customer the maximum
price that he or she is willing to pay. Most often the seller places customers in groups based on
certain attributes and charges each groups a different price. Apparently, price discrimination is
only feasible under certain conditions: 1) companies have short run market power; 2) consumers
can be segmented either directly or indirectly, 3) arbitrage across differently priced goods is
infeasible (Stole, 2003). Given the fact that these conditions are fulfilled, companies typically have
an incentive to practice price discrimination. However, the form of the price discrimination may
also depend on the nature of the market power. Jagmohagn Raju (2007) highlights that Apple’s
price cut is an example of a strategy known as “temporal price discrimination” where it charges
people different prices depending on the their desire or ability to pay. Companies such as Apple
may practice this strategy for two reasons. First, they gain wide profit margins from those willing
to pay a premium price. Second, they benefit from high volume by building a wider customer base
for the product later. It’s important to note that price discrimination can also be structured across
geographies, seasons and by adding or eliminating features. As for the “temporal price
discrimination,” Apple reduced $200 from the original price of the iPhone just two months after its
release. After a flood of complaints by its customers, Apple attempt to rectify complaints by
offering $100 store credit to early iPhone customers. In addition to temporal price discrimination,
Apple practices price discrimination via versioning where it proposes many versions of products
according to the needs and prices of their customers’. The “wealthy” clients can buy a latest
version of iPod classic, iPod nano or iPod touch while those who are less “wealthy” can always
pay the price of a previous generation iPod (classic or nano) or an iPod Shuffle (49$). The current
iPod line consists of (from left to right): the iPod shuffle, iPod nano, iPod classic and iPod touch.
The variety of Apple music players are well illustrated by the graph below:

48
This large offer is constantly renewed which allows the company to practice the
skimming and reassure the snobbish members of the Apple family.

Apple’s Strategy: United States and Europe

Apple’s high-tech inventions may be in direct conflict with the high end products
made by Nokia, Motorola, Sony Ericsson and Samsung. However, these companies will not give
up that category without fighting for the end. They are used to cramming their phones with more
technology than their competitors as in the case with Nokia's N series, Sony's P series, and
Motorola's range of smart phones. They have high resolution cameras and video recorders, MP3
players, software and dozens of gameslso; not to mention the fact that they already have large
market shares. For instance, the number of Symbian-based phones increased 44% to 34.6
million in the first six months of 2007 from 24 million in 1H 2006, with a quarter of those sales
coming from Japan. The success of Nokia N95 and E-Series phones has also helped Symbian
boost its revenues to about $172 million (Malik, 2007). The North-American market is very
different from the rest of the world, with strong segments for Microsoft, Palm (Access), and RIM.
In Europe (EMEA) the market is dominated by Symbian (Nokia), with a small Microsoft pocket
and an even smaller RIM market share. It's also interesting to see the large Linux share in Japan
and China (PRC). In Europe, Britain's O2 and Germany's T-Mobile have signed exclusive deals
with Apple to offer the iPhone to their domestic customers. In Britain, subscribers will have to pay
between $74 and $115 per month for an 18-month contract, while in Germany, customers must
fork over $72 to $130 per month for a two-year contract (Scott, 2007). It appears that Apple is
going against the grain of the European mobile business by charging £269 ($538) for the phone
in Britain, and locking customers into 18-month contracts at monthly rates of £35 to £55 ($70 to
$110). Typically, carriers discount even high-end cell phones in Europe. Such figures are in
addition to the cost of the iPhone handset—which is itself a radical departure for the European
market, where most phones are heavily subsidized by operators. British and German customers
had to pay $565 and $439, respectively, for the iPhone, compared with $399 for U.S. consumers.
In France, Apple has chosen Orange as an exclusive carrier for its iPhone, which is sold in
Orange’s online and direct retail stores. The iPhone is available in an 8GB model for
€399 ($592.78) and customers need to sign up for one of the special "Orange for iPhone" plans,
which range in prices from €49 to €119 per month depending on the usage. Customers can also

49
buy the iPhone for €549 if they wish to use one of Orange's other rate plans. If not, they have the
option to buy an iPhone for €649 ($964.20) without a plan.

The European market is pretty much dominated by “pay-as-you-go customers” who have no
contractual obligations to phone carriers and they make up 60% of the phone users (O’Brian,
2007). As a result, the iPhone may be insufficient to induce people to sign up for one or two year
service contracts. Currently, the iPhone is available (March, 2008) at 99€ in Germany and in
United Kingdom whereas it cost more than 400€ in November 2007. On the one hand, the price
cut can be explained by the arrival of a new iPhone in June 2008 compatible with 3G networks.
On the other hand, it may be due to the disappointing sales in Europe: 100 000 iPhones sold in
France, 70 000 in Germany and 200 000 in the UK while Apple’s objective was to sell 10 000 000
globally by the end of 20082.

The challenge for Apple is to keep coming up with proprietary products that fuel its business
model, which is based on innovation and R&D for both hardware and software. Apple’s pricing
strategies include setting the price high at the start of launching a new product. After gaining
some profits from its early customers who are often fascinated with new technology, Apple seems
to reduce its prices in order to make it affordable and popular among other competitive products.
Not to mention the fact that Apple’s iPhone and iPod prices change according to its customers as
well as geographical locations. Basically, the company adapts prices according to the customers’
ability to pay in different countries. In addition to applying versioning and skimming pricing
strategies, Apple also practices vertical bundling, linking the use of an iPod to the use of its
iTunes stores. The company argues that protecting iTunes codes is in fact encouraging
innovation. However, it also allows the company to control a large part of: portable digital media
player market, online music market and online video market. At the same time, it maintains
sufficient economic power in these markets in order to control consumer pricing, which ends up
having its consumers pay higher prices. With its iPhone, Apple has tried to bind users to AT&T in
the US, Orange in France, T-Mobile in Germany and O2 in the UK. However, low sales rates in
European countries have shown that iPhone prices were in fact too in comparison to similar
smartphones issued by its competitors on the phone market. In order to respond to this
challenge, Apple has used its best arm - innovation and will soon issue a new version of the
iPhone, which is expected to relaunch iPhone sales.

50
Sales Forecast
Yearly & Quarterly Financial Results
The following charts and graph show Apple Computer's overall and Retail Segment financial
results for the period since stores were first opened in May 2001. The results are based on the
fiscal year, which basically ends Sept. 30th

2001 2002 2003 2004 2005

$13.93
sales - all segments $5.373 billion $5.742 billion $6.207 billion $8.279 billion
billion

profit (loss) - all $1.328


($25 million) $65 million $69 million $266 million
segments billion

$2.350
sales - Retail segment $19 million $283 million $621 million $1.185 billion
billion

profit (loss) - Retail


not reported ($22 million) ($5 million) $39 million $151 million
segment

total store visitors 2.25 million 13.9 million 25.2 million 50.7 million

stores during year * 27 13 25 21 38

capital expenditures -
$92 million $100 million $132 million
retail

retail lease square-feet 660,000 s.f. 902,000 s.f.

Retail manufacturing
$213 million $435 million
profit #

2006 2007 2008 2009

$36.537
sales - all segments $19.31 billion $24.0 billion $32.47billion
billion

profit (loss) - all $ 1.989


$3.496 billion $4.84 billion $5.704 billion
segments billion

51
sales - Retail segment $3.359 billion $4.115 billion $6.31 billion $6.577 billion

profit (loss) - Retail


$198 million $573 million $1.33 billion $1.392
segment

total store visitors 81.1 million 102.4 million 146.8 million 170.3 million

stores during year * 41 32 54 26

capital expenditures -
$200 million $294 million $389 million
retail

retail lease square-feet

Retail manufacturing
$663 million
profit #

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