Apple Inc

Apple Inc. (NASDAQ: AAPL, LSE: 0HDZ, FWB:APC), formerly Apple Computer, Inc., is an American multinational corporation with a focus on designing and manufacturing consumer electronics and closely related software products. Established in Cupertino, California on April 1, 1976, Apple develops, sells, and supports a series of personal computers, portable media players, mobile phones, computer software, and computer hardware and hardware accessories. As of September 2007, the company operates about 200 retail stores in five countries[3] and an online store where hardware and software products are sold. The iTunes Store provides music, music videos, television programs, movies, podcasts, iPod games, and audiobooks, which can be downloaded using iTunes on Mac OS X or Windows, and also on the iPod touch and the iPhone. The company's best-known hardware products include the Macintosh line of personal computers, the iPod line of portable media players, and the iPhone. Apple's software products include the Mac OS X operating system, the iLife suite of multimedia and creativity software, and Final Cut Studio, a suite of professional audio- and film-industry software products.
The company, incorporated January 3, 1977,[4] was known as "Apple Computer, Inc." for its first 30 years. On January 9, 2007, the company dropped "Computer" from its corporate name,[5] reflecting the company's ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers.[6] Apple employs over 20,000 permanent and temporary workers worldwide[2] and had worldwide annual sales in its fiscal year 2007 (ending September 29, 2007) of US$24.01 billion.[1] For a variety of reasons, ranging from its philosophy of comprehensive aesthetic design to its distinctive advertising campaigns, Apple has engendered a unique reputation in the consumer electronics industry. This includes a customer base, particularly in the United States, that is unusually devoted to the company and its brand
Current products
Hardware
Apple introduced the Apple Macintosh family in 1984 and today makes consumer, professional, and educational computers. The Mac mini is the company's consumer sub-desktop computer, introduced in January 2005 and designed to motivate Windows users to switch to the Mac computer platform. The iMac is a consumer desktop computer that was first introduced by Apple in 1998, and its popularity helped revive the company's fortunes. The iMac is similar in concept to the original Macintosh in that the monitor and computer are housed in a single unit. It is now in its third major design iteration, and has been upgraded many times (including a switch to Intel processors) using the same design. Apple sells three lines of portable computers: the MacBook which includes a 13 inch widescreen, and is available in white and black variants, the MacBook Air, an ultra-thin, ultra-portable notebook with a 13.3 inch LED backlit widescreen and the MacBook Pro, a professional portable computer alternative to the MacBook. The MacBook Pro is marketed as being intended for professional and creative users, and offers configurations with 15-inch and 17-inch displays. The Mac Pro is Apple's workstation-class desktop computer offering, which is housed in an aluminum enclosure that matches the design aesthetic of the Apple Cinema Display. Apple also offers a rack mounted computer called the Xserve, a dual core, dual processor 1U server.
Apple sells a variety of computer accessories for Mac computers including the AirPort wireless networking products, Time Capsule, Apple Cinema Display, Mighty Mouse, the Apple Wireless Keyboard computer keyboard, and the Apple USB Modem.
The current iPods, Apple's most successful product line. Shown here, (left to right) the iPod shuffle, iPod nano, iPod classic and iPod touch.
The current iPods, Apple's most successful product line. Shown here, (left to right) the iPod shuffle, iPod nano, iPod classic and iPod touch.
On October 23, 2001, Apple introduced the iPod digital music player. Initially equipped with a 5 GB hard drive and a monochrome screen, models today can store up to 160 GB and display video, play games, and support a wide range of third-party add-on devices. As of September 2007, Apple sells four variants of the iPod: the iPod shuffle, iPod nano, iPod classic and iPod touch. The iPod is the market leader in portable music players by a significant margin, with more than 100 million units shipped as of April 9, 2007.[49] Apple has partnered with Nike to introduce the Nike+iPod Sports Kit enabling runners to sync and monitor their runs with iTunes and the Nike+ website.
At the Macworld Conference & Expo in January 2007, Steve Jobs revealed the long anticipated iPhone, a convergence of an Internet-enabled smartphone and video iPod. The iPhone combines a 2.5G quad band GSM and EDGE cellular phone with features found in hand held devices, running a scaled-down versions of Apple's Mac OS X, with various applications such as Safari web browser, e-mail, and navigation. The iPhone features a 3.5 inch touch screen display, 8 GB of memory, Bluetooth, and Wi-Fi (both "b" and "g"). The iPhone first became available on June 29, 2007.
Additionally at the conference, Jobs demonstrated the Apple TV, (previously known as the iTV), a set-top video device intended to bridge the sale of content from iTunes with high-definition televisions. The device links up to a user's TV and syncs, either via Wi-Fi or a wired network, with one computer's iTunes library and streams from an additional four. The Apple TV incorporates a 40 GB hard drive for storage, includes outputs for HDMI and component video, and plays video at a maximum resolution of 720p. It was later updated to include a 160 GB drive for even more space for media.
Software
Apple develops its own operating system to run on Macs, Mac OS X, the latest version being Mac OS X v10.5 Leopard. Apple also independently develops computer software titles for its Mac OS X operating system. Much of the software Apple develops is bundled with its computers. An example of this is the consumer-oriented iLife software package which bundles iDVD, iMovie, iPhoto, iTunes, GarageBand, and iWeb. For presentation, page layout and word processing, iWork is available, which includes Keynote, Pages, and Numbers. iTunes, QuickTime media player, and Safari web browser are available as free downloads for both Mac OS X and Windows.
Apple also offers a range of professional software titles. Their range of server software includes the operating system Mac OS X Server; Apple Remote Desktop, a remote systems management application; WebObjects, Java Web application server; and Xsan, a Storage Area Network file system. For the professional creative market, there is Aperture for professional RAW-format photo processing; Final Cut Studio, a video production suite; Logic, a comprehensive music toolkit and Shake, an advanced effects composition program.
Apple also offers online services with .Mac which bundles .Mac HomePage, .Mac Mail, .Mac Groups, .Mac iDisk, .Mac Backup, .Mac Sync, and Learning Center online tutorials.
Corporate affairs
Critics of Apple commonly point to their vertically integrated business model, where all the hardware and operating system software comes from one company. Although the Apple II was very open, the Macintosh was originally closed and proprietary, and during the Mac's early history Apple generally refused to adopt prevailing industry standards for hardware, instead creating and implementing their own (for example, The Lisa's FileWare drive, and the ADB).[citation needed]
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 such standards. FireWire is an Apple-originated standard which has seen widespread industry adoption after it was standardized as IEEE 1394.[50]
However, the iPod remains a mostly closed and vertically integrated platform. Although Apple provides documented interfaces for hardware accessories, developers have no supported way to add features to the software (such as decoding of additional formats).[citation needed] Although the iPod supports the mainstream MP3 and AAC formats, there is not support for other proprietary formats, like Windows Media (this can be converted to AAC with iTunes on Windows), RealAudio and the open Ogg Vorbis format. Apple has refused to license its FairPlay DRM system to other online music vendors.[47] The company added Windows PC support with their second generation iPod series.[51]
Ever since the first Apple store opened, Apple has wanted third parties to sell their products and software inside their stores. This allows, for instance, Nikon and Canon to sell their Mac-compatible digital cameras and camcorders inside the store. Adobe, the largest Apple software partner, also sells its Mac-compatible software, as does Microsoft, who sells Microsoft Office for the Mac. A notable exception are books published by John Wiley & Sons, who publishes the For Dummies series of instructional books. The publisher's line of books were banned from Apple Stores in 2005 because Steve Jobs disagreed with their editorial policy.[52]
Headquarters
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 which total 850,000 sq ft (79,000 m²). and was built in 1993 by Sobrato Development Cos.[53]
In 2006, Apple announced its intention to build a second campus on 50 acres assembled from various contiguous plots. The new campus, also in Cupertino, will be about one mile east of the current campus.
Slogans
Apple's first slogan, "Byte into an Apple", was coined in the late 1970s.[60] Once Apple started selling more than just computers, slogans were created for each individual product, rather than for the company itself. For example, the slogan "iThink, therefore iMac", was used in 1998 to promote the iMac. Several company-directed slogans are marketed today; however Apple tends to focus mainly on marketing its products individually.
Litigation
Apple's earliest court action dates to 1978 when Apple Records, The Beatles-founded record label, filed suit against Apple Computer for trademark infringement. The suit settled in 1981 with an amount of US$80,000 being paid to Apple Corps. As a condition of the settlement, Apple Computer agreed to stay out of the music business. The case arose in 1989 again when Apple Corps sued over the Apple IIGS, which included a professional synthesizer chip, claiming violation of the 1981 settlement agreement. In 1991 another settlement of around US$26.5 million was reached.[61] In September 2003 Apple Computer was sued by Apple Corps again, this time for introducing the iTunes Music Store and the iPod, which Apple Corps believed was a violation of the previous agreement by Apple Computer not to distribute music.[62] The trial in the UK ended on May 8, 2006 with victory for Apple Computer. The judge ruled the company's iTunes Music Store did not infringe on the trademark of Apple Corps and ordered Apple Corps to pay the legal costs.[63] A new settlement was announced on February 5, 2007 giving Apple, Inc. control over the Apple mark with Apple Corps licensed to use it. Portions of the settlement are confidential, but each side will pay its own legal costs. As the Beatles' songs are not available for download from any legal music download sites, including the iTunes Music Store, Jobs' highly public nod to the Beatles (playing "Lovely Rita" on the iPhone) during his January 9, 2007 Macworld keynote fueled widespread speculation about a deal to sell Beatles songs on iTunes. A spokewoman for Apple Corps said the settlement had no bearing on any such matter.[64]
Of the matter, Steve Jobs said "We love the Beatles, and it has been painful being at odds with them over these trademarks. It feels great to resolve this in a positive manner, and in a way that should remove the potential of further disagreements in the future."[65]
In July 1998, Abdul Traya registered the domain name appleimac.com, shortly after Apple announced the iMac, in an attempt to draw attention to the web-hosting business he was running out of his parents' basement.[66] After a legal dispute that lasted until April 1999, Traya and Apple settled out of court with Apple paying legal fees and giving Traya a "token payment" in exchange for the domain name.[67]
In a more recent previously unrelated lawsuit, Apple entered into a class action settlement,[68] upheld on December 20, 2005 following an appeal, regarding the battery life of iPod music players sold prior to May 2004. Eligible members of the class are entitled to extended warranties, store credit, cash compensation, or battery replacement.
Creative also recently filed a patent dispute alleging that Apple infringed on one of Creative's patents for their Zen player with the iPod and iPod nano.[69] On August 23, 2006, Apple and Creative settled their patent disputes by paying Creative US$100 million.
On January 10, 2007, Cisco sued Apple for the iPhone, since Cisco has held the trademark on the name "iPhone" since 2000. Cisco had refused rights to use the name "iPhone" on multiple occasions. Apple and Cisco had been in talks for a while about use of the name, though Apple had been denied the use of the name on several occasions leading up through January 9. Cisco alleged that Apple created a front company to attempt to acquire the name through other means, but failed also. During the 2007 Macworld Expo, Apple used Cisco's "iPhone" name anyway.[70] On February 22, 2007 Cisco and Apple announced an agreement under which both companies would be allowed to use the iPhone name worldwide.[71]
In July 2007, Colorado-based photographer Louis Psihoyos filed suit against Apple for allegedly ripping his "wall of videos" imagery to advertise for Apple TV. According to Psihoyos, Apple had been negotiating with Psihoyos for rights to the imagery, but backed out and promptly used the imagery anyway.[72]
Stock option backdating investigation
On June 29, 2006, Apple announced that an internal investigation "discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001."[73] A Special Committee reported the findings of the stock backdating investigation three months later on October 4, 2006, stating "the investigation found no misconduct by any member of Apple's current management team", ... "the most recent evidence of irregularities relates to a January 2002 grant", and "stock option grants made on 15 dates between 1997 and 2002 appear to have grant dates that precede the approval of those grants". The Special Committee also reported that "in a few instances, Apple CEO Steve Jobs was aware that favorable grant dates had been selected, but he did not receive or otherwise benefit from these grants and was unaware of the accounting implications."[74] Documents were subsequently faked to indicate a special board meeting had occurred and that the options had been granted on that day.[75] The backdating gave Jobs a potential net gain of more than US$20 million had he exercised his options.[76]
On April 24, 2007, the SEC announced it had filed charges against former Apple chief financial officer Fred D. Anderson and former Apple general counsel Nancy R. Heinen for their alleged roles in backdating Apple options.[77] Anderson immediately settled the charges for a payment of a civil penalty of US$150,000 and disgorgement of "ill-gotten gains" of approximately US$3.49 million.[77] Heinen was charged with, among other things, violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, lying to Apple's auditors, and violating prohibitions on circumventing internal controls, based on the options awarded to Steve Jobs (dated October 19, 2001 but allegedly granted in December 2001) and also option grants awarded to top company executives, including Heinen (dated January 17, 2001, but allegedly granted in February 2001.[77]) The SEC is seeking injunctive relief, disgorgement, and money penalties against Heinen, in addition to an order barring her from serving as an officer or director of a public company.[77] The charges against Heinen remain pending.[77]
In late April 2007, the SEC announced that it would not bring action against Apple due to its "swift, extensive, and extraordinary cooperation in the Commission's investigation." Most analysts took this statement to mean that Apple was in the clear, and Steve Jobs personally read the statement to concerned shareholders at a meeting.[citation needed]
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 terms of organizational hierarchy (flat versus tall, casual versus formal attire, etc). Other highly successful firms with similar cultural aspects from the same time period include Southwest Airlines and Microsoft. Originally, the company stood in opposition to staid competitors like IBM more or less 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 differentiated itself from its competitors.[78]
Apple Fellows
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,[79] Steve Capps,[80] Rod Holt,[79] Alan Kay,[81][82] Guy Kawasaki,[81][83] Don Norman,[81] Rich Page,[79] and Steve Wozniak.
Environmental Record
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Apple has a track record of being an environmentally conscious company. Four areas of particular attention are product and packaging design, responsible manufacturing, energy efficiency, and recycling. Design dictates the quantity of raw materials, type and recylability of materials, energy consumption required for manufacturing and use, and the ease of recycling. Like other flat panel displays, Apple's displays eliminate more than two pounds of lead, consume up to 80% less energy in sleep mode, and weigh half as much as their CRT counterparts. Apple plans to completely eliminate the use of polyvinyl chloride (PVC) and brominated flame retardants (BFRs) in its products, and arsenic in the glass of flat-panel displays by the end of 2008.[84]
The EPA rates Apple Computer highest amongst producers of notebook computers, and fairly well compared to producers of desktop computers and LCD displays.[85]
In 2007, Apple released its first MacBook Pro with mercury free LED backlit display and in 2008 released its first MacBook Pro with arsenic free LCD.[86]
Since 2004, Greenpeace has attacked Apple for not setting a timeline to remove PVC and BFRs, which still exist in recent products such as the iPod nano and MacBook; and for not promoting a global end-of-life take back plan for Apple hardware (although it does within Europe and Japan where this is required by law); as well as for not having reusable components.[87] As of December 2006, Greenpeace ranked Apple last out of ten electronics companies in dealing with toxic substances in their products, mostly due to a lack of relevant documentation and timelines.[88] On May 2, 2007, Steve Jobs released an open letter named A Greener Apple,[89] responding to some of the allegations. In his letter, Jobs stated:
In one environmental group’s recent scorecard, Dell, HP and Lenovo all scored higher than Apple because of their plans (or “plans for releasing plans” in the case of HP). Apple claims to be ahead of all of these companies in eliminating toxic chemicals from its products.[89]
A study in January 2006 by the United States Environmental Protection Agency found that Apple's hardware compares favorably with that of its major competitors on environmental friendliness.[90]
On June 5, 2007, Apple updated their MacBook Pro product line. This hardware update is environmentally notable because LEDs fully replaced cold cathode lamps in the 15 inch MacBook Pro's display backlighting,[91] a first for Apple laptops (the iPod has had LED backlighting since its creation in 2001). This ameliorates Apple's environmental stance, as cold cathode lamps contain mercury, whereas LEDs do not.
At the 2007 Macworld Expo, environmentalists such as Greenpeace presented a critique of Apple. Rick Hind, the legislative director of Greenpeace's toxics campaign, said, "(The company) is getting greener, but not green enough." Hind commented further, "The Macbook Air has less toxic PVC plastic and less toxic BFRs, but it could have zero and that would make Apple an eco-leader."[92] Climate Counts, a nonprofit organization dedicated to directing consumers toward the greenest companies, gave Macintosh an 11 points out of a possible 100 which places the company last among electronic corporations. Climate counts also labelled Macintosh with a "stuck icon," and the environmental group added that Macintosh was, "a choice to avoid for the climate conscious consumer."[93] On the other hand, Macintosh CEO Steve Jobs, stated to the environmentalists, "get out of the computer business (and) go save some whales."