cik
stringclasses
1 value
date
stringlengths
8
8
form
stringclasses
4 values
sentenceCount
int64
0
2.33k
sentence
stringlengths
2
5.25k
filename
stringlengths
40
40
0000320193
20071115
10-K
336
Therefore, the Company remains subject to significant risks of supply shortages and/or price increases that can have a material adverse effect on its financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
337
The Company expects to experience decreases in its gross margin percentage in fiscal year 2008, as compared to levels achieved during fiscal year 2007, due in part to current and expected future price increases for certain components.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
338
See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Gross Margin."
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
339
The Company's new products often use custom components from only one source until the Company has evaluated whether there is a need for, and subsequently qualifies, additional suppliers.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
340
Where a component or product uses new technologies, initial capacity constraints may exist until the suppliers' yields have matured.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
341
The Company and other producers in the personal computer, consumer electronics and mobile communication industries also compete for various components with other industries that have experienced increased demand for their products.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
342
The Company uses some custom components that are not common to the rest of the personal computer, consumer electronics or mobile communication industries.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
343
Continued availability of these components at acceptable prices may be affected if producers decide to concentrate on the production of components other than those customized to meet the Company's requirements.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
344
If the supply of a key component for a new or existing product were delayed or constrained, or if such components were available only at significantly higher prices, the Company's financial condition and operating results could be materially adversely affected.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
345
The Company depends on component and product manufacturing and logistics services provided by third parties, many of whom are located outside of the U.S.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
346
Most of the Company's components and products are manufactured in whole or in part by third-party manufacturers, most of which are located outside of the U.S. A significant concentration of this outsourced manufacturing is currently performed by only a few third-party manufacturers, often in single locations.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
347
The Company has also outsourced much of its transportation and logistics management.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
348
While these arrangements may lower operating costs, they also reduce the Company's direct control over production and distribution.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
349
It is uncertain what effect such diminished control will have on the quality or quantity of products or services, or the Company's flexibility to respond to changing conditions.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
350
In addition, the Company relies on third-party manufacturers to adhere to the Company's supplier code of conduct.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
351
Although arrangements with such manufacturers may contain provisions for warranty expense reimbursement, the Company may remain responsible to the consumer for warranty service in the event of product defects.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
352
Any unanticipated product defect or warranty liability, whether pursuant to arrangements with contract manufacturers or otherwise, could have a material adverse effect on the Company's reputation, financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
353
Final assembly of the Company's products is currently performed in the Company's manufacturing facility in Cork, Ireland, and by external vendors in California, Korea, China and the Czech Republic.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
354
Currently, the supply and manufacture of many critical components is performed by sole-sourced third-party vendors in the U.S., China, Japan, Korea, and Singapore.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
355
Sole-sourced third- party vendors in China perform final assembly of substantially all of the Company's portable products, including MacBook Pros, MacBooks, iPods and iPhones.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
356
If manufacturing or logistics in these locations is disrupted for any reason, including natural disasters, information technology system failures, military actions or economic, business, labor, environmental, public health, or political issues, the Company's financial condition and operating results could be materially...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
357
The Company relies on third-party digital content, which may not be available to the Company on commercially reasonable terms or at all.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
358
The Company contracts with third parties to offer their digital content through the Company's iTunes Store.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
359
The Company pays substantial fees to obtain the rights to this content.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
360
The Company's licensing arrangements with these third parties are short-term and do not guarantee the continuation or renewal of these arrangements on reasonable terms, if at all.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
361
Some third-party content providers currently or may in the future offer competing products and services, and could take action to make it more difficult or impossible for the Company to license their content in the future.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
362
Other content owners, providers or distributors may seek to limit the Company's access to, or increase the total cost of, such content.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
363
If the Company is unable to continue to offer a wide variety of content at reasonable prices with acceptable usage rules, or continue to expand its geographic reach, the Company's financial condition and operating results may be materially adversely affected.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
364
Many third-party content providers require that the Company provide certain digital rights management ("DRM") and other security solutions.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
365
If these requirements change, the Company may have to develop or license new technology to provide these solutions.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
366
There is no assurance the Company will be able to develop or license such solutions at a reasonable cost and in a timely manner.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
367
In addition, certain countries have passed or may propose legislation that would force the Company to license its DRM, which could lessen the protection of content and subject it to piracy and could also affect arrangements with the Company's content providers.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
368
The Company relies on access to third-party patents and intellectual property, and the Company's future results could be materially adversely affected if it is alleged or found to have infringed intellectual property rights.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
369
Many of the Company's products are designed to include third-party intellectual property, and it may be necessary in the future to seek or renew licenses relating to various aspects of its products and business methods.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
370
Although the Company believes that, based on past experience and industry practice, such licenses generally could be obtained on commercially reasonable terms, there is no assurance that the necessary licenses would be available on acceptable terms or at all.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
371
Because of technological changes in the global personal computer, consumer electronics and mobile communication industries, current extensive patent coverage, and the rapid issuance of new patents, it is possible that certain components of the Company's products and business methods may unknowingly infringe the patents...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
372
From time to time, the Company has been notified that it may be infringing such rights.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
373
Responding to such claims, regardless of their merit, can consume significant time and expense, and several pending claims are in various stages of evaluation.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
374
In certain cases, the Company may consider the desirability of entering into licensing agreements, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
375
If there is a temporary or permanent injunction prohibiting the Company from marketing or selling certain products or a successful claim of infringement against the Company requires it to pay royalties to a third party, the Company's financial condition and operating results could be materially adversely affected.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
376
Information regarding certain claims and litigation related to alleged patent infringement and other matters is set forth in Part I, Item 3, "Legal Proceedings."
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
377
In management's opinion, the Company does not have a potential liability for damages or royalties from any known current legal proceedings or claims related to the infringement of patent or other intellectual property rights that would individually or in the aggregate have a material adverse effect on its financial con...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
378
However, the results of such legal proceedings cannot be predicted with certainty.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
379
Should the Company fail to prevail in any of the matters related to infringement of patent or other intellectual property rights of others described in Part I, Item 3, "Legal Proceedings," or should several of these matters be resolved against the Company in the same reporting period, the Company's financial condition ...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
380
With the June 2007 introduction of iPhone, the Company has begun to compete with mobile communication device companies that hold significant patent portfolios.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
381
Regardless of the scope or validity of such patents or the merits of any potential patent claims by competitors, the Company may have to engage in protracted litigation, enter into expensive agreements or settlements and/or modify its products.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
382
Any of these events could have a material adverse impact on the Company's financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
383
The Company's products experience quality problems from time to time that can result in decreased sales and operating margin.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
384
The Company sells highly complex hardware and software products that can contain defects in design and manufacture.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
385
Sophisticated operating system software and applications, such as those sold by the Company, often contain "bugs" that can unexpectedly interfere with the software's operation.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
386
Defects may also occur in components and products the Company purchases from third parties.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
387
There can be no assurance that the Company will be able to detect and fix all defects in the hardware and software it sells.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
388
Failure to do so could result in lost revenue, harm to reputation, and significant warranty and other expenses, and could have a material adverse impact on the Company's financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
389
The Company expects its quarterly revenue and operating results to fluctuate for a variety of reasons.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
390
The Company's profit margins vary among its products and its distribution channels.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
391
The Company's software, accessories, and service and support contracts generally have higher gross margins than certain of the Company's other products, including third-party content from the iTunes Store.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
392
Gross margins on the Company's hardware products vary across product lines and can change over time as a result of product transitions, pricing and configuration changes, and component, warranty, and other cost fluctuations.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
393
The Company's direct sales generally have higher associated gross margins than its indirect sales through its channel partners.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
394
In addition, the Company's gross margin and operating margin percentages, as well as overall profitability, may be materially adversely impacted as a result of a shift in product, geographic or channel mix, or new product announcements.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
395
The Company generally sells more products during the third month of each quarter than it does during either of the first two months.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
396
This sales pattern can produce pressure on the Company's internal infrastructure during the third month of a quarter and may adversely affect the Company's ability to predict its financial results accurately.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
397
Furthermore, the Company has typically experienced greater net sales in the first and fourth fiscal quarters compared to other quarters in the fiscal year due to seasonal demand related to the holiday season and the beginning of the school year.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
398
Developments late in a quarter, such as lower-than-anticipated demand for the Company's products, an internal systems failure, or failure of one of the Company's key logistics, components supply, or manufacturing partners, could have a material adverse impact on the Company's financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
399
The Company currently relies on a single cellular network carrier for iPhone in each of the U.S., U.K., Germany and France.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
400
AT&T, O2, T-Mobile and Orange are the Company's cellular network carriers for iPhone in the U.S., U.K., Germany and France, respectively.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
401
If these carriers cannot successfully compete with other carriers in their markets for any reason, including but not limited to the quality and coverage of wireless voice and data services, performance and timely build-out of advanced wireless networks, and pricing and terms of end-user contracts, iPhone sales may be a...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
402
Because the Company's agreements require each carrier to make revenue-generating payments to the Company, a carrier's non-performance under or termination of an agreement, or its inability to attract and retain iPhone customers, could have a material adverse effect on the Company's future financial condition and operat...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
403
If, contrary to the Company's license agreements or product specifications, an iPhone is "unlocked" from an authorized carrier's network, the Company would not receive payments related to that iPhone from such carrier, which could have a material adverse effect on the Company's future financial condition and operating ...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
404
The Company may choose to enter into arrangements with carriers in other countries or regions, and the same risks described above would also apply to those arrangements.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
405
The Company is subject to risks associated with laws, regulations and industry-imposed standards related to mobile communications devices.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
406
Laws and regulations related to mobile communications devices in the many jurisdictions in which the Company operates are extensive and subject to change.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
407
Such changes, which could include but are not limited to restrictions on production, manufacture, distribution, and use of the device, locking the device to a carrier's network, or mandating the use of the device on more than one carrier's network, may have a material adverse effect on the Company's financial condition...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
408
Mobile communication devices, such as iPhone, are subject to certification and regulation by governmental and standardization bodies, as well as by cellular network carriers for use on their networks.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
409
These certification processes are extensive and time consuming, and could result in additional testing requirements, product modifications or delays in product shipment dates, which may have a material adverse effect on the Company's financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
410
Failure of information technology systems and breaches in data security could adversely affect the Company's financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
411
Information technology system failures and breaches of data security could disrupt the Company's operations by causing delays or cancellation of customer orders, impeding the manufacture or shipment of products, or resulting in the unintentional disclosure of customer or Company information.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
412
Management has taken steps to address these concerns by implementing sophisticated network security and internal control measures.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
413
There can be no assurance, however, that a system failure or data security breach will not have a material adverse effect on the Company's financial condition and operating results.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
414
The Company's stock price may be volatile.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
415
The Company's stock has at times experienced substantial price volatility as a result of variations between its actual and anticipated financial results and as a result of announcements by the Company and its competitors.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
416
The stock market as a whole has also experienced extreme price and volume fluctuations that have affected the market price of many technology companies in ways that may have been unrelated to these companies' operating performance.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
417
Furthermore, the Company believes its stock price reflects high future growth and profitability expectations.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
418
If the Company fails to meet these expectations its stock price may significantly decline.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
419
Economic conditions, political events, war, terrorism, public health issues, natural disasters and other circumstances could materially adversely affect the Company.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
420
The Company's operations and performance depend significantly on worldwide economic conditions.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
421
War, terrorism, geopolitical uncertainties, public health issues, and other business interruptions have caused and could cause damage or disruption to international commerce and the global economy, and thus may have a strong negative effect on the Company, its suppliers, logistics providers, manufacturing vendors and c...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
422
The Company's business operations are subject to interruption by natural disasters, fire, power shortages, terrorist attacks, and other hostile acts, labor disputes, public health issues, and other events beyond its control.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
423
Such events could decrease demand for the Company's products, make it difficult or impossible for the Company to make and deliver products to its customers or to receive components from its suppliers, and create delays and inefficiencies in the Company's supply chain.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
424
Should major public health issues, including pandemics, arise, the Company could be negatively affected by more stringent employee travel restrictions, additional limitations in freight services, governmental actions limiting the movement of products between regions, delays in production ramps of new products, and disr...
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
425
The majority of the Company's research and development activities, its corporate headquarters, information technology systems, and other critical business operations, including certain component suppliers and manufacturing vendors, are located near major seismic faults.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
426
Because the Company does not carry earthquake insurance for direct quake-related losses and significant recovery time could be required to resume operations, the Company's financial condition and operating results could be materially adversely affected in the event of a major earthquake.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
427
The Company's success depends largely on its ability to attract and retain key personnel.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
428
Much of the Company's future success depends on the continued service and availability of skilled personnel, including its CEO, its executive team and key employees in technical, marketing and staff positions.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
429
Experienced personnel in the technology industry are in high demand and competition for their talents is intense, especially in the Silicon Valley, where the majority of the Company's key employees are located.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
430
The Company has relied on equity awards as one means for recruiting and retaining this highly skilled talent.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
431
Recent accounting regulations requiring the expensing of stock options have resulted in increased stock-based compensation expense, which has caused the Company to reduce the number of stock-based awards issued to employees.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
432
There can be no assurance that the Company will continue to successfully attract and retain key personnel.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
433
Unfavorable results of legal proceedings could materially adversely affect the Company.
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
434
The Company is subject to various legal proceedings and claims that are discussed in Part I, Item 3, "Legal Proceedings."
0001047469-07-009340/full-submission.txt
0000320193
20071115
10-K
435
The Company is also subject to other legal proceedings and claims that have arisen in the ordinary course of business and have not been fully adjudicated.
0001047469-07-009340/full-submission.txt