Apple's Success

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May 11, 2011

Apple, Inc.

Although there is hardly anyone left in the world that does not know anything about the company Apple, the following synopsis will demonstrate how this successful firm really does make a profit. Just go into any electronics store or a cell carrier, and you’ll get to see almost all other companies that are trying to keep up with Apple. When the iPhone came out, it was the leader in multi-touch screen phones. Now, almost all the phones for sale are similar in their functionality. Same is noticed with the iPad. A year ago there were hardly any tablets on the market. Now that Apple has paved the way for that niche, others are following once again. Recently on April 20, 2011, Apple announced its second quarter profit of almost $6 billion with $24.67 billion in revenue. These are remarkable numbers considering the previous year at exactly the same time, Apple had posted a mere $3 billion in profit and $13.5 billion in revenue, with international sales out-numbering domestic by 10%. With these recent numbers, Apple has taken in more revenue in one quarter than Google will do in a whole year. This comparison with Google is significant, since these are two giants in the tech industry with some overlapping products. With Google’s stock price at $525 a share as of April 22, and Apple’s at $350 is an example of their presence in the marketplace. But how did Apple become so large and so successful? Was it luck, marketing, innovation? It was probably a combination of these things. They are definitely doing something right. Yet another perspective; Wall Street had projected $19 billion in revenue from Microsoft and $21.6 billion from Google on an annual basis. And apple comes along and out-performs both figures in just a quarter!

A multinational corporation, Apple focuses on designing and manufacturing consumer electronics and related software. Located in Cupertino, California, Apple started in 1976. It develops and sells computers, mobile phones, portable media players, and computer hardware/software. The firm operates 200 retail stores in five countries and an online store where you can purchase hardware and software. The iTunes Store is an online warehouse of music, audio books, iPod games, television programs, movies, and music videos. These can be downloaded onto a Mac or Windows, as well as the iPod touch and the iPhone. Apple is best known for their hardware; Macintosh computers, iPod media players, and the iPhone. Software that the company offers to consumers are the Mac OS X operating system, Final Cut studio, professional audio/video industry products, and creativity related products. In 1977, Apple Computer dropped its “computer” component in their name to be called just “Apple” now. With over 20,000 employees worldwide as of 2007, it has become an innovator in its industry.

Apple’s Breakdown of revenue by their four major products is the iPod 11%, the iPad 16% (current figures may have a higher value), the Mac at 33%, and finally the iPhone with the remaining and the biggest share of 40%. The recent financial report of 2011 has skyrocketed the iPhone to the over-50% revenue club. In addition to its tangible products, iTunes earned over a billion dollars, and other hardware and software accounted for about $2 billion. Last year, a record was set for Mac sales; 3.5 million Macs sold during the June quarter, up from 33% year-over-year. The Mac not only out-paced the growth rate for PC’s, around 20%, but saw insane growth in Europe, 46%, and even a higher growth rate in Asia with a whopping 71%. More than 60 million people visited 293 Apple Stores last quarter, spending $2.68 billion. They purchased, among other Apple things, some 677,000 Macs, about one in every five Macs sold, and about half of the buyers had never previously owned a Mac. Apple’s cash now exceeds $50 billion, enough to bailout Greece, buy Warren Buffet, or even Nintendo....
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