Profile: Apple Inc. (AAPL.O)

Apple Inc. (Apple), incorporated on January 3, 1977, designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players, and sells a variety of related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. In addition, the Company sells a variety of third-party Macintosh (Mac), iPhone and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and various other accessories and peripherals through its online and retail stores, and digital content and applications through the iTunes Store. The Company sells to consumer, small and mid-sized business (SMB), education, enterprise, government and creative customers. In December 2009, the Company acquired digital music service Lala.

Mac Hardware Products

The Company offers a range of personal computing products, including desktop and notebook computers, servers, related devices and peripherals, and various third-party hardware products. The Company’s Mac desktop and portable systems feature Intel microprocessors, the Company’s Mac OS X Version 10.6 Snow Leopard (Mac OS X Snow Leopard) operating system and iLife suite of software for creation and management of digital photography, music, movies, digital versatile discs (DVDs) and Websites.

The MacBook Pro family of notebook computers is designed for professionals and consumers. In June 2009, the Company updated its aluminum unibody MacBook Pro line to include 13-inch, 15-inch and 17-inch models. Each MacBook Pro includes an LED-backlit display, a glass Multi-Touch trackpad, an illuminated keyboard, a secure digital (SD) card or ExpressCard slot, a FireWire 800 port, built-in AirPort Extreme 802.11n wireless networking and Bluetooth 2.1. The 13-inch MacBook Pro includes up to 2.53 gigahertz in processor speed and an NVIDIA GeForce 9400M graphics processor. The 15-inch and 17-inch MacBook Pro models offer up to 3.06 GHz in processor speed and the NVIDIA GeForce 9600M GT discrete graphics processor.

The MacBook is designed for consumer and education users. In October 2009, the Company updated its MacBook with a polycarbonate unibody design that includes a light-emitting diode (LED)-backlit display and a glass Multi-Touch trackpad. The MacBook includes up to 2.26 gigahertz in processor speed, NVIDIA GeForce 9400M graphics processor, support for up to 4GB of 1066 megahertz SDRAM memory, up to a 500 gigabytes Serial ATA hard drive, a SuperDrive, built-in AirPort Extreme 802.11n wireless networking and Bluetooth 2.1.

In June 2009, the Company updated its MacBook Air, an ultra-slim notebook computer that measures 0.16-inches at its thinnest point and 0.76-inches at its maximum height when closed. The MacBook Air includes up to 2.13 gigahertz processor speed with 6 megabytes of Level 2 cache, NVIDIA GeForce 9400M graphics processor, 2 gigabytes of memory, and a 128 gigabytes hard drive. The MacBook Air includes a 13.3-inch LED-backlit widescreen display, a full-size backlit keyboard, a built-in iSight video camera, a trackpad with Multi-Touch gesture support, and built-in AirPort Extreme 802.11n wireless networking and Bluetooth 2.1.

The Mac Pro desktop computer is targeted at business and professional customers and is designed to meet the performance, expansion, and networking needs of the most demanding Mac user. The iMac desktop computer is targeted at consumer, education and business customers. The Mac mini is a desktop computer measuring 6.5 by 6.5 by 2-inches. Xserve is a 1U rack-mount server available with up to two 2.93 gigahertz Quad-Core Intel Xeon processors and features Mac OS X Server 10.6 Snow Leopard. iPhone combines a mobile phone, a widescreen iPod with touch controls, and an Internet communications device in a single handheld product. In addition to the Company’s own iPhone accessories, third-party iPhone compatible products, including headsets, cables and docks, power supplies, and carrying cases, are available through the Company’s online and retail stores or from third parties.

Music Products and Services

The Company offers its iPod line of portable digital music and video players and related accessories to Mac and Windows users. All iPods work with the Company’s iTunes digital music management software (iTunes) available for both Mac and Windows-based computers. The Company also provides an online service to distribute third-party music, audio books, music videos, short films, television shows, movies, podcasts, and applications through its iTunes Store. In addition to the Company’s own iPod accessories, third-party iPod compatible products are available, either through the Company’s online and retail stores or from third parties, including portable and desktop speaker systems, headphones, car radio solutions, voice recorders, cables and docks, power supplies and chargers, and carrying cases and armbands.

In September 2009, the Company updated the third-generation iPod shuffle, a flash-memory-based iPod. iPod shuffle holds up to 1,000 songs. iPod shuffles include a shuffle switch feature that allows users to listen to their music in random order or in the order of their playlists synced through iTunes. In September 2009, the Company introduced the new iPod nano, a flash-memory-based iPod. The iPod nano includes a video camera, microphone and speaker, a built-in frequency module (FM) radio with live pause functionality, iTunes Tagging, and a built-in pedometer. The iPod classic is an upgraded version of the original iPod, the Company’s hard-drive based portable digital music and video player.

iTunes is an application for playing, downloading, and organizing digital audio and video files, and is available for both Mac and Windows-based computers. iTunes is integrated with the iTunes Store, a service that allows customers to find, purchase, rent, and download third-party digital music, audio books, music videos, short films, television shows, movies, games, and other applications. In September 2009, the Company announced iTunes 9, which includes Genius Mixes, a feature in Genius technology, Home Sharing, which allows users to transfer music, movies and television (TV) shows among up to five authorized computers, and allows users to organize their iPhone applications in iTunes, to sync music by artist and genre, and to sync photos by Events and Faces.

Peripheral Products

The Company sells a variety of Apple-branded and third-party Mac-compatible peripheral products directly to end-users through its retail and online stores, including printers, storage devices, computer memory, digital video and still cameras, and various other computing products and supplies. The Company manufactures the Apple Cinema High Definition Display, a 30-inch widescreen flat panel display. Apple TV is a device that permits users to wirelessly play iTunes content on a widescreen television. Compatible with a Mac or Windows-based computer, Apple TV includes a 160 gigabytes hard drive capable of storing up to 200 hours of video, 36,000 songs, 25,000 photos, or a combination of each and is compatible with high definition televisions with resolution up to 1080 pixels.

Software Products and Computer Technologies

The Company offers a range of software products for consumer, SMB, education, enterprise, government, and creative customers, including the Company’s operating system software; server software and related solutions; professional application software, and consumer, education, and business oriented application software. Mac OS X is built on an open-source UNIX-based foundation. Mac OS X Snow Leopard features upgraded speed and performance and includes a new version of QuickTime X, support for Microsoft Exchange Server 2007 and VoiceOver integration with the Multi-Touch trackpad. Mac OS X Snow Leopard refines 90% of the projects in Mac OS X, is about half the size of the previous version, and frees up to 7 gigabytes of drive space once installed. In January 2009, the Company introduced iLife ’09, the latest release of its consumer-oriented digital lifestyle application suite, which features iPhoto, iMovie, iDVD, GarageBand, and iWeb.

iPhoto is the Company’s consumer-oriented digital photo software application, which includes new features for organizing and browsing photos, including Faces and Places which use face detection, face recognition and global positioning system (GPS) geo-tagging technologies. iMovie is the Company’s consumer-oriented digital video editing software application and features the Precision Editor, video stabilization, advanced drag and drop, and animated travel maps. iDVD is the Company’s consumer-oriented software application that enables users to turn iMovie files, QuickTime files, and digital pictures into interactive DVDs. GarageBand is the Company’s consumer-oriented music creation software application that allows users to play, record and create music using a simple interface. iWeb allows users to create online photo albums, blogs and podcasts, and to customize websites using editing tools.

In January 2009, the Company introduced iWork ’09, the latest version of the Company’s integrated productivity suite designed to help users create, present, and publish documents, presentations, and spreadsheets. iWork ’09 includes updates to Pages ’09 for word processing and page layout, Keynote ’09 for presentations, and Numbers ’09 for spreadsheets. In July 2009, the Company updated Final Cut Studio, the Company’s video production suite designed for video professionals. Final Cut Studio 2 features Final Cut Pro 7 for video editing, DVD Studio Pro 4 for DVD authoring, Motion 4 for real-time motion graphics, Soundtrack Pro 3 for audio editing and sound design, Color 1.5 for color grading and finishing, and Compressor 3.5 for encoding media in multiple formats. The Company also offers Final Cut Express 4, a consumer version of the Company’s movie making software, and Final Cut Server 1.5.

In July 2009, the Company updated Logic Studio, a suite of professional tools used by musicians and professionals to create, perform, and record music. Logic Studio features Logic Pro 9, an upgraded version of the Company’s music creation and audio production software application; MainStage 2, a live performance application; Soundtrack Pro 3, a professional audio post production software; Compressor 3.5 for encoding in a variety of formats; Studio Instruments, made up of 40 instrument plug-ins; Studio Effects, with 80 professional effect plug-ins; and studio Sound Library. In addition, the Company offers Logic Express 9, a version that includes many of the features of Logic Studio Pro and provides an easy entry into professional music production. The FileMaker Pro database software offers relational databases and desktop-to-Web publishing capabilities.

Internet Software and Services

The Company is focused on delivering seamless integration with and access to the Internet throughout the Company’s products and services. In June 2009, the Company released Safari 4, a Web browser compatible with Macs and Windows PCs. Safari 4 features the Nitro engine, which runs JavaScript faster than Safari 3 and includes browsing functionality with Top Sites, Full History Search and Cover Flow. Safari 4 supports video and audio tags in hypertext markup language (HTML) 5 and supports CSS 3 Animations and Web Fonts, which provide designers additional choices of fonts to create web sites.

QuickTime, the Company’s multimedia software for Mac or Windows-based computers, features streaming of live and stored video and audio over the Internet and playback of audio and video on computers. QuickTime 7 features H.264 encoding and can automatically determine a user’s connection speed. QuickTime 7 also delivers multi-channel audio and supports a range of industry standard audio formats. The Company also offers QuickTime X, a new version of QuickTime that ships with Mac OS X Snow Leopard, and QuickTime 7 Pro, a suite of software tools, allows creation and editing of Internet-ready audio and video files.

MobileMe is an annual subscription-based suite of Internet services that delivers email, contacts and calendars to and from native applications on iPhone, iPod touch, Macs, and Windows-based computers. MobileMe services include Internet message access protocol mail, an ad-free email service; Website hosting for publishing Websites from iWeb; iDisk, a virtual hard drive accessible anywhere with Internet access; Web Gallery for viewing and sharing photos that is fully integrated with iPhoto and iMovie; MobileMe Sync, which keeps Safari bookmarks, iCal calendars, Address Book information, Keychain, and Mac OS X Mail preferences up-to-date across multiple computers, iPhones, and iPod touches.