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0000320193
20221028
10-K
300
Although malicious attacks perpetrated to gain access to confidential information, including personal information, affect many companies across various industries, the Company is at a relatively greater risk of being targeted because of its high profile and the value of the confidential information it creates, owns, ma...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
301
The Company has implemented systems and processes intended to secure its information technology systems and prevent unauthorized access to or loss of sensitive data, and mitigate the impact of unauthorized access, including through the use of encryption and authentication technologies.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
302
As with all companies, these security measures may not be sufficient for all eventualities and may be vulnerable to hacking, ransomware attacks, employee error, malfeasance, system error, faulty password management or other irregularities.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
303
For example, third parties can fraudulently induce the Company’s or its vendors’ employees or customers into disclosing user names, passwords or other sensitive information, which can, in turn, be used for unauthorized access to the Company’s or its vendors’ systems and services.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
304
To help protect customers and the Company, the Company deploys and makes available technologies like multifactor authentication, monitors its services and systems for unusual activity and may freeze accounts under suspicious circumstances, which, among other things, can result in the delay or loss of customer orders or...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
305
While the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
306
Investment in new business strategies and acquisitions could disrupt the Company’s ongoing business, present risks not originally contemplated and materially adversely affect the Company’s business, reputation, results of operations and financial condition.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
307
The Company has invested, and in the future may invest, in new business strategies or acquisitions.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
308
Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, economic, political, legal and regulatory challenges associated with operating in new businesses, regions or countries, inadequate return on capita...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
309
Investment and acquisition transactions are exposed to additional risks, including failing to obtain required regulatory approvals on a timely basis or at all, or the imposition of onerous conditions that could delay or prevent the Company from completing a transaction or otherwise limit the Company’s ability to fully ...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
310
These new ventures are inherently risky and may not be successful.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
311
The failure of any significant investment could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
312
The Company’s retail stores have required and will continue to require a substantial investment and commitment of resources and are subject to numerous risks and uncertainties.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
313
The Company’s retail stores have required substantial investment in equipment and leasehold improvements, information systems, inventory and personnel.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
314
The Company also has entered into substantial lease commitments for retail space.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
315
Certain stores have been designed and built to serve as high-profile venues to promote brand awareness.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
316
Because of their unique design elements, locations and size, these stores require substantially more investment than the Company’s more typical retail stores.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
317
Due to the high cost structure associated with the Company’s retail stores, a decline in sales or the closure or poor performance of an individual store or multiple stores, including as a result of protective public safety measures in response to the COVID-19 pandemic, could result in significant lease termination cost...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
318
The Company’s retail operations are subject to many factors that pose risks and uncertainties and could adversely impact the Company’s business, results of operations and financial condition, including macro-economic factors that could have an adverse effect on general retail activity.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
319
Other factors include the Company’s ability to: manage costs associated with retail store construction and operation; manage relationships with existing retail partners; manage costs associated with fluctuations in the value of retail inventory; and obtain and renew leases in quality retail locations at a reasonable co...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
320
Apple Inc. | 2022 Form 10-K | 12 Legal and Regulatory Compliance Risks The Company’s business, results of operations and financial condition could be adversely impacted by unfavorable results of legal proceedings or government investigations.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
321
The Company is subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business and have not yet been fully resolved, and new matters may arise in the future.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
322
In addition, agreements entered into by the Company sometimes include indemnification provisions which can subject the Company to costs and damages in the event of a claim against an indemnified third party.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
323
The number of claims, legal proceedings and government investigations involving the Company, and the alleged magnitude of such claims, proceedings and government investigations, has generally increased over time and may continue to increase.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
324
The Company has faced and continues to face a significant number of patent claims relating to its cellular-enabled products, and new claims may arise in the future.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
325
For example, technology and other patent-holding companies frequently assert their patents and seek royalties and often enter into litigation based on allegations of patent infringement or other violations of intellectual property rights.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
326
The Company is vigorously defending infringement actions in courts in several U.S. jurisdictions, as well as internationally in various countries.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
327
The plaintiffs in these actions frequently seek injunctions and substantial damages.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
328
Regardless of the merit of particular claims, defending against litigation or responding to government investigations can be expensive, time-consuming and disruptive to the Company’s operations.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
329
In recognition of these considerations, the Company may enter into agreements or other arrangements to settle litigation and resolve such challenges.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
330
There can be no assurance such agreements can be obtained on acceptable terms or that litigation will not occur.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
331
These agreements can also significantly increase the Company’s cost of sales and operating expenses and require the Company to change its business practices and limit the Company’s ability to offer certain products and services.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
332
Except as described in Part I, Item 3 of this Form 10-K under the heading “Legal Proceedings” and in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 10, “Commitments and Contingencies” under the heading “Contingencies,” in the opinion of management, there was not at least a r...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
333
The outcome of litigation or government investigations is inherently uncertain.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
334
If one or more legal matters were resolved against the Company or an indemnified third party in a reporting period for amounts above management’s expectations, the Company’s results of operations and financial condition for that reporting period could be materially adversely affected.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
335
Further, such an outcome can result in significant compensatory, punitive or trebled monetary damages, disgorgement of revenue or profits, remedial corporate measures or injunctive relief against the Company, and can require the Company to change its business practices and limit the Company’s ability to offer certain p...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
336
While the Company maintains insurance coverage for certain types of claims, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
337
The Company is subject to complex and changing laws and regulations worldwide, which exposes the Company to potential liabilities, increased costs and other adverse effects on the Company’s business.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
338
The Company’s global operations are subject to complex and changing laws and regulations on subjects, including antitrust; privacy, data security and data localization; consumer protection; advertising, sales, billing and e-commerce; financial services and technology; product liability; intellectual property ownership ...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
339
Apple Inc. | 2022 Form 10-K | 13 Compliance with these laws and regulations is onerous and expensive.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
340
New and changing laws and regulations can adversely affect the Company’s business by increasing the Company’s costs, limiting the Company’s ability to offer a product, service or feature to customers, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain ...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
341
New and changing laws and regulations can also create uncertainty about how such laws and regulations will be interpreted and applied.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
342
These risks and costs may increase as the Company’s products and services are introduced into specialized applications, including health and financial services.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
343
The Company has implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no assurance the Company’s employees, contractors or agents will not violate such laws and regulations or the Company’s policies and procedures.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
344
If the Company is found to have violated laws and regulations, it could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
345
Regulatory changes and other actions that materially adversely affect the Company’s business may be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse impacts from such measures.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
346
For example, the Company is subject to changing regulations relating to the export and import of its products.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
347
Although the Company has programs, policies and procedures in place that are designed to satisfy regulatory requirements, there can be no assurance that such policies and procedures will be effective in preventing a violation or a claim of a violation.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
348
As a result, the Company’s products could be delayed or prohibited from importation, either of which could materially adversely affect the Company’s business, reputation, results of operations and financial condition.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
349
Expectations relating to environmental, social and governance considerations expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on the Company’s business.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
350
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human and civil rights, and diversity, equity and inclusion.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
351
In addition, the Company makes statements about its environmental, social and governance goals and initiatives through its environmental, social and governance report, its other non-financial reports, information provided on its website, press statements and other communications.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
352
Responding to these environmental, social and governance considerations and implementation of these goals and initiatives involves risks and uncertainties, requires investments, and depends in part on third-party performance or data that is outside the Company’s control.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
353
The Company cannot guarantee that it will achieve its announced environmental, social and governance goals and initiatives.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
354
In addition, some stakeholders may disagree with the Company’s goals and initiatives.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
355
Any failure, or perceived failure, by the Company to achieve its goals, further its initiatives, adhere to its public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and standards could result in lega...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
356
The technology industry, including, in some instances, the Company, is subject to intense media, political and regulatory scrutiny, which exposes the Company to increasing regulation, government investigations, legal actions and penalties.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
357
From time to time, the Company has made changes to its App Store, including actions taken in response to competition, market and legal conditions.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
358
The Company may make further business changes in the future.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
359
New legislative initiatives, such as the EU Digital Markets Act, or similar laws in other jurisdictions, could require further changes.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
360
These changes could include how and to what extent the Company charges developers for access to its platforms and manages distribution of apps outside of the App Store.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
361
The Company is also currently subject to antitrust investigations in various jurisdictions around the world, which can result in legal proceedings and claims against the Company that could, individually or in the aggregate, have a materially adverse impact on the Company’s business, results of operations and financial ...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
362
For example, the Company is the subject of investigations in Europe and other jurisdictions relating to App Store terms and conditions.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
363
If such investigations result in adverse findings against the Company, the Company could be exposed to significant fines and may be required to make changes to its App Store business, all of which could materially adversely affect the Company’s business, results of operations and financial condition.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
364
The Company is also subject to litigation relating to the App Store, which has resulted in changes to the Company’s business practices, and may in the future result in further changes.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
365
Further, the Company has commercial relationships with other companies in the technology industry that are or may become subject to investigations and litigation that, if resolved against those other companies, could materially adversely affect the Company’s commercial relationships with those business partners and mat...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
366
For example, the Company earns revenue from licensing arrangements with other companies to offer their search services on the Company’s platforms and apps, and certain of these arrangements are currently subject to government investigations and legal proceedings.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
367
Apple Inc. | 2022 Form 10-K | 14 There can be no assurance the Company’s business will not be materially adversely affected, individually or in the aggregate, by the outcomes of such investigations, litigation or changes to laws and regulations in the future.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
368
Changes to the Company’s business practices to comply with new laws and regulations or in connection with other legal proceedings could negatively impact the reputation of the Company’s products for privacy and security and otherwise adversely affect the experience for users of the Company’s products and services, and ...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
369
The Company’s business is subject to a variety of U.S. and international laws, rules, policies and other obligations regarding data protection.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
370
The Company is subject to federal, state and international laws relating to the collection, use, retention, security and transfer of various types of personal information.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
371
In many cases, these laws apply not only to third-party transactions, but also restrict transfers of personal information among the Company and its international subsidiaries.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
372
Several jurisdictions have passed laws in this area, and additional jurisdictions are considering imposing additional restrictions or have laws that are pending.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
373
These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
374
Complying with emerging and changing requirements causes the Company to incur substantial costs and has required and may in the future require the Company to change its business practices.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
375
Noncompliance could result in significant penalties or legal liability.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
376
The Company makes statements about its use and disclosure of personal information through its privacy policy, information provided on its website, press statements and other privacy notices provided to customers.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
377
Any failure by the Company to comply with these public statements or with other federal, state or international privacy or data protection laws and regulations could result in inquiries or proceedings against the Company by governmental entities or others.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
378
In addition to reputational impacts, penalties could include ongoing audit requirements and significant legal liability.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
379
In addition to the risks generally relating to the collection, use, retention, security and transfer of personal information, the Company is also subject to specific obligations relating to information considered sensitive under applicable laws, such as health data, financial data and biometric data.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
380
Health data and financial data are subject to additional privacy, security and breach notification requirements, and the Company is subject to audit by governmental authorities regarding the Company’s compliance with these obligations.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
381
If the Company fails to adequately comply with these rules and requirements, or if health data or financial data is handled in a manner not permitted by law or under the Company’s agreements with healthcare or financial institutions, the Company can be subject to litigation or government investigations, and can be liab...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
382
Payment card data is also subject to additional requirements.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
383
Under payment card rules and obligations, if cardholder information is potentially compromised, the Company can be liable for associated investigatory expenses and can also incur significant fees or fines if the Company fails to follow payment card industry data security standards.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
384
The Company could also experience a significant increase in payment card transaction costs or lose the ability to process payment cards if it fails to follow payment card industry data security standards, which could materially adversely affect the Company’s business, reputation, results of operations and financial con...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
385
Financial Risks The Company expects its quarterly net sales and results of operations to fluctuate.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
386
The Company’s profit margins vary across its products, services, geographic segments and distribution channels.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
387
For example, the gross margins on the Company’s products and services vary significantly and can change over time.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
388
The Company’s gross margins are subject to volatility and downward pressure due to a variety of factors, including: continued industry-wide global product pricing pressures and product pricing actions that the Company may take in response to such pressures; increased competition; the Company’s ability to effectively st...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
389
These and other factors could have a materially adverse impact on the Company’s results of operations and financial condition.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
390
The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday demand.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
391
Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
392
Further, the Company generates a significant portion of its net sales from a single product and a decline in demand for that product could significantly impact quarterly net sales.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
393
The Company could also be subject to unexpected developments, such as lower-than-anticipated demand for the Company’s products or services, issues with new product or service introductions, information technology system failures or network disruptions, or failure of one of the Company’s logistics, components supply, or...
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
394
Apple Inc. | 2022 Form 10-K | 15 The Company’s financial performance is subject to risks associated with changes in the value of the U.S. dollar relative to local currencies.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
395
The Company’s primary exposure to movements in foreign currency exchange rates relates to non-U.S. dollar-denominated sales, cost of sales and operating expenses worldwide.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
396
Gross margins on the Company’s products in foreign countries and on products that include components obtained from foreign suppliers could be materially adversely affected by foreign currency exchange rate fluctuations.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
397
The weakening of foreign currencies relative to the U.S. dollar adversely affects the U.S. dollar value of the Company’s foreign currency-denominated sales and earnings, and generally leads the Company to raise international pricing, potentially reducing demand for the Company’s products.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
398
In some circumstances, for competitive or other reasons, the Company may decide not to raise international pricing to offset the U.S. dollar’s strengthening, which would adversely affect the U.S. dollar value of the gross margins the Company earns on foreign currency-denominated sales.
0000320193-22-000108/full-submission.txt
0000320193
20221028
10-K
399
Conversely, a strengthening of foreign currencies relative to the U.S. dollar, while generally beneficial to the Company’s foreign currency-denominated sales and earnings, could cause the Company to reduce international pricing and incur losses on its foreign currency derivative instruments, thereby limiting the benefi...
0000320193-22-000108/full-submission.txt