Apple Inc. at a Glance

Uppers

  • Working for a top brand that helps influence people's daily life
  • Working with the best and the brightest

Downers

  • Some employees say that promotion and finding a career path can be challenging
  • Negative press over supply chain issues in China and elsewhere
  • Demanding culture of perfectionism

The Bottom Line

  • You don't choose to work for Apple; the company chooses you-small wonder given that Apple is widely recognized as one of the most desirable companies in the world to work for.

About Apple Inc.

Ask Siri to name the most successful company in the world and it might respond: Apple. And it's not just out of familial pride. In terms of profit, revenue, market capitalization, and consumer cachet, it certainly ranks right up there. The iPhone, in its 10th year and eighth and ninth generations, has been the company's golden goose, generating tens of billions in revenue and profit. In addition to the iPhone, other familiar Apple products and services include Mac computers and iPad tablets, as well as iTunes, the App store, and Apple Music. Primarily a consumer-oriented company, Apple has inked several alliances with Accenture, General Electric, and IBM to deepen its penetration of the enterprise market. About 60% of revenue comes from outside the Americas.

Operations

Apple's iPhone accounts for more than 60% of sales, while its other hardware products, the iPad line and the Mac desktop and notebook computers, account for about 10% each. Services, which includes the App Store, iCloud, Apple Music, and Apple Pay mobile payment, is the second biggest revenue producer, supplying about 15% of revenue. Products grouped under the Other segments make up the remaining sales.

Apple's hardware products are tightly integrated with the company's software, which helps its devices work smoothly, but in some ways limits its market reach and can frustrate users who would like to have access to more third-party products including hardware. The company's operating systems are iOS for mobile devices, MacOS for computers, Apple WatchOS for the watch, and tvOS for Apple TV. The company generally releases generational updates of its operating systems once a year.

The company makes some of its products at facilities in Ireland and the US, but most manufacturing is handled by third party contractors, such as Hon Hai Precision Industry, also known as FoxConn, operating in Asia.

Geographic Reach

Apple generates 40% of sales in the Americas market, which includes the US, while Greater China and Europe each contribute about a quarter of revenue.

The company has nearly 500 Apple retail stores across the US, as well as in some 20 other countries; China and Canada are the largest retail store markets outside the US.

Sales and Marketing

Apple sells its products through its own retail stores and website, as well as through a direct sales force. In addition, the company distributes through indirect channels, such as third-party retailers, resellers, and cellular network carriers such as Verizon, AT&T, Sprint, and T-Mobile. Indirect channels account for about 70% of Apple's revenue.

Financial Performance

The popularity of the iPhone fueled Apple's strong revenue and earnings growth in the past decade. The company's revenue and profit hit all-time highs in 2015, coming in at $234 million and $53 million, respectively. Revenue and earnings fell back in 2016 with weaker iPhone sales. The company recovered somewhat in 2017 (ended September), reporting 6% increases in sales and profit from 2016.

Apple's revenue rose to about $229 billion in 2017 from 2016 with increases in most product lines and geographies. The company sold more iPhones at higher average prices, due to a different product mix (including the iPhone 7 and 7 Plus), in 2017 from 2016. Mac sales booked their best year ever, posting the highest annual revenue in the company's history. Services recorded a second straight year of greater than 20% growth from more App store and licensing sales; the unit was the company's second biggest revenue producer. Sales of the iPad continued to weaken in 2017, dropping 7% from 2016. Apple's sales in Greater China, a key overseas market, fell in 2017 (the only geographic market with a year-to-year drop) in revenue from lower unit sales.

Higher revenue helped lift net income to about $48 billion in 2017 from about $46 billion in 2016 as expenses remained steady as a percentage of revenue year-to-year.

Apple generated about $64 billion in cash from operations in 2017, a dip from about $66 billion in 2016. In 2017 operating cash came from cash net income and non-cash adjustments to net income. A decrease of more than $5 billion in the net change in operating assets and liabilities included a one-time payment of about $2 billion related to a multi-year license agreement.

Strategy

Apple has two priorities: maintain the popularity of the iPhone and come up with a new world-changing product.

In 2017 Apple released the iPhone 8 and iPhone 8 Plus, as well as the iPhone X. The company positioned the iPhone 8 models as continuations of the previous phones with incremental improvements. The X model, however, is the foundation for its next decade of phones. It's price point was definitely new: about $1,000. The phone's features include a higher quality camera, a high-resolution display, the A11 Bionic chip (with artificial intelligence capabilities), Face ID for unlocking the phone, and augmented reality (AR) capabilities.

AR is the foundation for solving the second priority, innovation. The AR capabilities in iOS 11 made the OS the world's largest platform for augmented reality and developers have created more than 1,000 apps with AR features. AR could provide phone users with more information about where they are and what they're doing. Apple has said that AR would change the way technology is used. The question is whether Apple's AR will roll out fast enough and be interesting enough to induce consumers and businesses to buy more phones (and likely other devices). The company's history of innovation has led the media, analysts, and customers to expect big products from Apple on a regular basis. They're disappointed when it fails to deliver.

In the meantime, Apple has released a new version of the Apple Watch that includes cellular service so that it can be used independently of a phone. The company launched the Apple Heart Study, which will use data from the watch to identify irregular heart rhythms and notify users when unusual patterns are detected.

Looking to increase its foothold in corporations, Apple has partnered with Accenture and General Electric to develop business uses for the iPhone and iPad. Apple and Accenture are developing tools and services for enterprise clients, while GE and Apple are bringing GE's industrial Internet of Things platform to iOS. Of more immediate import, GE plans to standardize its 330,000 workers on iPhone and iPad.

Apple has been encouraged by the 2017 performances of the Mac computers and its services segment, particularly the Apple Music streaming service. Apple Music subscriptions rose up 75% year-over-year. The overall segment has grown at a better-than-20% pace in recent years.

Apple has money to develop new products and services. At the end of 2017 (ended September), it has about $268 billion in cash. Some $252 billion was held overseas. The US tax overhaul made law in late 2017 reduced the rate at which cash returned to the US would be taxed. That means the company could free the cash to hire more workers, build more factories, buy back more stock or raise its dividends.

Mergers and Acquisitions

In 2017 Apple agreed to acquire Texture, which offers digital subscriptions to about 200 magazines for a monthly fee. The acquisition slots into Apple's services segment, which includes Apple Music. Magazines available on Texture, which has been called the Netflix of magazines, include the New Yorker, Men's Health, Time, Rolling Stone, Real Simple, and Cosmopolitan. Texture's parent company, Next Issue Media LLC, is owned publishers Condé Nast, Hearst, Meredith, and Rogers Media, and private equity firm, KKR.

In 2017 Apple said it would acquire Shazam, the music identification application for smartphones. What Apple didn't say was why it would acquire Shazam, but it would be in connection with the Apple Music service. When a user opens the Shazam app while music is playing, the app identifies the song and artist. Shazam, based in the UK, has operated since 2012 and was an early offering on Apple's app store with more than a billion downloads since.

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Company News and Press Releases

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Apple Inc.

1 Apple Park Way
Cupertino, CA 95014-0642
Phone: 1 (408) 996-1010
Fax: 1 (408) 974-2483

Stats

  • Employer Type: Public
  • Stock Symbol: AAPL
  • Stock Exchange: NASDAQ
  • CEO: Timothy D. Cook
  • Chairman: Arthur D. Levinson
  • COO: Jeffrey E. Williams
  • 2017 Employees: 123,000

Major Office Locations

  • Cupertino, CA

Other Locations

  • Anchorage, AK
  • Huntsville, AL
  • Vestavia, AL
  • Little Rock, AR
  • Gilbert, AZ
  • Glendale, AZ
  • Phoenix, AZ
  • Scottsdale, AZ
  • Tucson, AZ
  • Bakersfield, CA
  • Berkeley, CA
  • Brea, CA
  • Burlingame, CA
  • Canoga Park, CA
  • Carlsbad, CA
  • Cerritos, CA
  • Chino, CA
  • Chula Vista, CA
  • Corte Madera, CA
  • Costa Mesa, CA
  • Elk Grove, CA
  • Emeryville, CA
  • Escondido, CA
  • Fresno, CA
  • Glendale, CA
  • Irvine, CA
  • Los Angeles, CA
  • Los Gatos, CA
  • Manhattan Beach, CA
  • Mission Viejo, CA
  • Modesto, CA
  • Monterey, CA
  • Newport Beach, CA
  • Palm Desert, CA
  • Palo Alto, CA
  • Pasadena, CA
  • Pleasanton, CA
  • Rancho Cucamonga, CA
  • Roseville, CA
  • Sacramento, CA
  • San Diego, CA
  • San Francisco, CA
  • San Jose, CA
  • San Luis Obispo, CA
  • San Mateo, CA
  • Santa Barbara, CA
  • Santa Clara, CA
  • Santa Monica, CA
  • Santa Rosa, CA
  • Sherman Oaks, CA
  • Sunnyvale, CA
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  • Thousand Oaks, CA
  • Valencia, CA
  • Walnut Creek, CA
  • Boulder, CO
  • Broomfield, CO
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  • Danbury, CT
  • Farmington, CT
  • Greenwich, CT
  • New Haven, CT
  • South Windsor, CT
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  • Trumbull, CT
  • Washington, DC
  • Newark, DE
  • Altamonte Springs, FL
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  • Beijing, China
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  • Chongqing, China
  • Dalian, China
  • Hangzhou, China
  • Nanjing, China
  • Shanghai, China
  • Shenyang, China
  • Zhengzhou, China
  • København, Denmark
  • Basingstoke, England
  • Bath, England
  • Birmingham, England
  • Brighton, England
  • Bristol, England
  • Bromley, England
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  • Exeter, England
  • Gateshead, England
  • Grays, England
  • Greenhithe, England
  • Kingston Upon Thames, England
  • Leeds, England
  • Leicester, England
  • Liverpool, England
  • London, England
  • Manchester, England
  • Newcastle-Upon-Tyne, England
  • Norwich, England
  • Plymouth, England
  • Sheffield, England
  • Solihull, England
  • Southampton, England
  • Watford, England
  • Helsinki, Finland
  • Aix En Provence, France
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  • Dijon, France
  • Le Chesnay, France
  • Lieusaint, France
  • Lille, France
  • Lyon, France
  • Marseille, France
  • Montpellier, France
  • Paris, France
  • Puteaux, France
  • Rosny Sous Bois, France
  • Saint Herblain, France
  • Saint Laurent Du Var, France
  • Serris, France
  • Strasbourg, France
  • Toulouse, France
  • Velizy Villacoublay, France
  • Ahmedabad, India
  • Amritsar, India
  • Bengaluru, India
  • Gurgaon, India
  • Mumbai, India
  • New Delhi, India
  • Rangareddy, India
  • Cologno Monzese, Italy
  • Roma, Italy
  • Chuo-Ku, Japan
  • Fukuoka, Japan
  • Nagoya, Japan
  • Osaka, Japan
  • Sendai, Japan
  • Shibuya-Ku, Japan
  • Belfast, Northern Ireland
  • Oslo, Norway
  • Moscow, Russia
  • Aberdeen, Scotland
  • Edinburgh, Scotland
  • Glasgow, Scotland
  • Basel, Switzerland
  • Genf, Switzerland
  • Glattzentrum Bei Wallisellen, Switzerland
  • Wallisellen, Switzerland
  • Zürich, Switzerland
  • Taipei City, Taiwan
  • Cardiff, Wales
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