Apple Inc

Apple? What’s that?

o American multinational headquartered in Cupertino, CA.

o Industries involved in

→ Consumer Electronics

→ Computer Software

→ Personal Computers

→ Digital Distribution

o Founded on April 1, 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne.

o Established as Apple Computer, Inc. in 1977

o Key people

→ Tim Cook, CEO

→ Arthur Levinson, Chairman

→ Jonathan Ive, Industrial Design

o Largest publicly traded company by market capitalization.

o Current Market Cap - $516.65bn at a stock price of $599

o Traded as AAPL on NASDAQ and S & P 500

One Infinite Loop

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A Brief History in Time

o 1976 – 1980: Beginnings

o 1981 – 1985: Mac Success

o 1986 – 1992: Rise and Fall

o 1993 – 1996: Continued Failures

o 1997 – 2000: Return from Death

o 2001 – 2011: Jobs Reinvents Apple

o 2011 – now : Back on Top

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Beginnings→ Apple I went on sale in July 1976 for $666.66→ Sold as a motherboard with CPU, RAM and basic textual-video chips→ Apple II, introduced on April 16, 1977 at West Coast Computer Faire→ Character-cell based colour graphics and open architecture→ First to use Apps like VisiCalc and 5 ¼ floppy drivers→ May 1980: Apple III launched as business-oriented PC

Mac Successo Dec 1980, 1980: Apple IPO becomes biggest since Ford in 1956o IBM enters PC market in August 1981; becomes leader by 1983o Lisa, first GUI based computer, launched in Jan 1983 @ $9,995o Jobs introduces Macintosh 128K on Jan 24, 1984 as first mass-market PCo Widely used in education sector and for desktop publishing

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Rise and Fall→ After initial sales, Mac revenue declined due to high price and limited software titles→ Jobs leaves Apple in 1985 after internal feud with Sculley and the board→ First 2:1 stock split and corporate dividend in 1987→ 4 acquisitions – Network Innovations, Styleware, Nashoba Sys and Coral Software in ’88→ Macintosh Portable introduced in 1989 with 12 hr battery life→ PowerBook launched in 1991 with new System 7→ Colour interface and network capabilities welcomed by customers

Battles with Microsofto Microsoft sees huge growth owing to Windows adoptiono PC manufacturers reduce Apple’s market share by licencing Windowso Sues Microsoft for using similar GUIo Loses huge money in Apple Computer, Inc vs Microsoft Corporation

lawsuit

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Continued Failures→ Failed experiments with cameras, audio players, video consoles, speakers→ Newton PDA platform and OS become billion-dollar duds→ Launches Power Macintosh in 1994 on Motorola’s processors→ Starts licensing Mac OS and ROMs to 3rd party manufacturers→ Acquires NeXT in Dec 1996 for $429mn and 1.5mn Apple shares

Return from Deatho Jobs returns as interim CEO in July 1997o Microsoft invests $150mn, 5-year Office commitment to Maco Flop products and platforms are discontinuedo Product lines are reduced and streamlinedo iMac, iBook and Power Mac G4 are the only new poducts

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Jobs Reinvents Apple→ Mac OS X, based on NeXT’s NeXTSTEP OS, introduced in 2001→ Apple Retail Stores opened in USA, global expansion in 2003→ First iPod launched in October 2001; 6mn sold in first 3 years→ iTunes service offered on Windows and Mac in 2003→ Moves on from coloured plastics to 2 tone anodized aluminium→ Transits all products to Intel processors and architecture→ MacBook Pro introduced in 2006, BootCamp for Windows users

iRevolutiono Drops the Computer in 2007, becomes Apple Inc.o Introduces iPhone with iPod, Phone, Safari and Google Mapso Releases iPod touch, based on iOS and a new App Storeo Announces iPad in 2010, iTunes crosses a billion downloadso Surpasses Microsoft profits and sales in 2011

Apple Store, Fifth Avenue, New York© Yash Mittal

Back on Top→ Introduces Siri, an intelligent software assistant and iCloud in 2011→ Jobs passes away a day later on October 5, 2011→ Unveils iPhone 5 and iPad mini in 2012, wins $1bn against Samsung→ Announces iTunes Radio, iOS 7, OS X Mavericks & Mac Pro at WWDC ‘13→ Releases iPhone 5S with 64-bit architecture and dual chips→ Plans new India strategy after sales grow 400% in Q2→ Launches iBeacon technology across stores in Dec 2013

Milestoneso 65 bn App Store downloads, 1 mn available appso 25 bn+ iTunes downloads, 15k per minute, >$10bn in saleso 350 mn iPods, 421 mn iPhones, 200 mn iPads soldo 424 Retail stores in 16 countries, 250 in the US

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Products

o Macintosho iPodo iPhoneo iPado Apple TVo iLife, iWorko Logic Pro

Services

o Apple Retailo iTunes Storeo iOS App Storeo Mac App Storeo iBookso iCloud

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Macintosh→ Introduced first in 1984 with 128k based on Motorola 68000→ Lisa branded as Macintosh XL and higher power PC→ Transited to Power processes in 1994 and launched PowerBook→ Brought out computers in colour through iMac and iBook→ Launched OS X, based on NeXTSTEP in 2001 with a new GUI→ Moved on to two tone aluminium unibody design→ Transited to Intel architecture and processors in 2005→ Used by creative professionals like photographers and DJs

Key Featureso First computer to feature Graphical User Interface and mouseo Various typography and calligraphy options availableo Added multitasking through HyperCard and MultiFindero New technologies like SuperDrive, SSDs and ThunderBolto Known for sharp Retina Display and high battery life

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Music

iPod→ Line of portable media players released on October 23, 2001→ First to make use of flash drives and metal body→ Use FireWire and Lightning connectors for fast data transfer→ Brought new interaction methods like ClickWheel & touch→ Known for minimalist and simplistic design language

iTuneso Media player, media library and device management applicationo Used to play, download and organize music, videos and appso Available across all form factors – iPod, iPhone, iPad, Mac & PCo Introduced Digital Rights Management and online storeo Provides online backup over iCloud, Podcasts and Bookso Includes proprietary sound processing features like crossfading

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iPhone→ Capacitive multitouch display smartphone using SoC design→ First to introduce ARM based processors on RISC architecture→ Includes accelerometer, gyroscope and proximity sensors→ Minimalist hardware and intuitive software UI design→ Led to a new industry of Mobile Applications through App Store→ Uses Natural Language Voice Control called Siri for assistance→ Introduced TouchID fingerprint scanner and 64-bit computing

iPado Introduced digital books through iBooks and iTuneso 3 main versions – Air, mini and iPad, all using Quad Core processorso Includes desktop class applications like GarageBand and Photoshopo Supports gapless playback, Retina Display and widescreen mediao Used widely in healthcare, education, analytics and movie industry

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Net Profits

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Net Sales

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Return on Net Sales

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Revenue Growth

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Stock Price

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Liquidity RatiosYear Current Ratio

2010 2.01

2011 1.61

2012 1.50

2013 1.68

2.011.61 1.5 1.68

2010 2011 2012 2013

Current ratio

Current ratio

Year Quick Ratio

2010 1.96

2011 1.58

2012 1.48

2013 1.64

1.961.58 1.48 1.64

2010 2011 2012 2013

Quick Ratio

Quick Ratio

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Profitability RatiosYear OPM(in %)

2010 28.19

2011 31.22

2012 35.30

2013 28.67

28.19 31.22 35.328.67

2010 2011 2012 2013

Operating Profit Margin

Operating Profit Margin

Year GPM(in %)

2010 39.38

2011 40.48

2012 43.87

2013 37.62

39.38 40.48

43.87

37.622

01

0

20

11

20

12

20

13

Gross Profit Margin

Gross Profit Margin

Year NPM(in %)

2010 21.48

2011 23.95

2012 26.67

2013 21.67

21.4823.95

26.6721.67

2010 2011 2012 2013

Net Profit Margin

NPM

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Profitability Ratios

Year ROTA( in %)

2010 18.64

2011 22.28

2012 23.70

2013 17.89

18.6422.28 23.7

17.89

2010 2011 2012 2013

Return on Total Assets

ROTA

Year ROE(in %)

2010 29.32

2011 33.83

2012 35.30

2013 29.98

29.3233.83 35.3

29.98

2010 2011 2012 2013

Return on Equity

ROE

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TurnoverYear Inventory Turnover

2010 37.62

2011 83.02

2012 111.05

2013 60.43

37.62

83.02

111.05

60.42

2010 2011 2012 2013

Inventory Turnover

Inventory Turnover

Year Total Asset Turnover

2010 0.87

2011 0.93

2012 0.89

2013 0.82

0.87

0.93

0.89

0.82

2010 2011 2012 2013

Total Asset Turnover

Total Asset Turnover

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Valuation

Year EPS (in $)

2010 15.15

2011 27.68

2012 44.15

2013 39.75

15.15

27.68

44.15

39.75

2010 2011 2012 2013

Earnings Per Share

EPS

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Strengthso Simple, intuitive, beautiful user interfaceo Powerful brand image associated with

superior quality and designo Loyal user base and evangelistso Highly refined supply chaino Billions in cash reserves for research

Weaknesseso Limited product lineso Relatively high priceso Comparatively lower global reacho Long gaps between new productso Less R & D facilities worldwide

Opportunitieso Growing demand for touch deviceso Use in enterprise marketo Only company to have full media hubo Integration across all platformso Seamless backups on iCloud

Threatso Highly competitive product marketso Cheaper offerings availableo Limited ability for customizationo Dependent on App Developerso Negative impact on image due to

various lawsuits

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Bibliography

References and links- Apple : investor.apple.com

- Wikipedia : http://en.wikipedia.org/wiki/History_of_Apple_Inc.

- Yahoo Finance : http://finance.yahoo.com/q/hp?s=AAPL&a=11&b=12&c=1980&d=04&e=6&f=2014&g=m

http://finance.yahoo.com/echarts?s=AAPL+Interactive

- NASDAQ : http://www.nasdaq.com/symbol/aapl/historical

http://www.nasdaq.com/symbol/aapl/stock-chart

- MSN Money : http://investing.money.msn.com/investments/equity-charts?symbol=AAPL

- Wall Street : http://www.crossingwallstreet.com/archives/2011/10/apples-share-price-history-1980-to-present

- Miscellaneous : http://www.tuaw.com/2013/04/23/a-history-of-apples-share-price/

http://ycharts.com/companies/AAPL/price

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Thank You

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