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0000320193
20141027
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In September 2014, the Company announced Apple Watch™, which is expected to be available in early calendar year 2015, and Apple Pay™, which became available in the U.S. in October 2014.
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The Company also sells and delivers digital content and applications through the iTunes Store®, App Store™, iBooks Store™ and Mac App Store.
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The Company sells its products worldwide through its retail stores, online stores and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers and value-added resellers.
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In addition, the Company sells a variety of third-party iPhone, iPad, Mac and iPod compatible products, including application software, and various accessories, through its online and retail stores.
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The Company sells to consumers, small and mid-sized businesses (“SMB”) and education, enterprise and government customers.
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The Company’s fiscal year is the 52 or 53-week period that ends on the last Saturday of September.
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The Company is a California corporation established in 1977. Business Strategy The Company is committed to bringing the best user experience to its customers through its innovative hardware, software and services.
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The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software and services to provide its customers products and solutions with innovative design, superior ease-of-use and seamless integration.
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As part of its strategy, the Company continues to expand its platform for the discovery and delivery of third-party digital content and applications through the iTunes Store.
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As part of the iTunes Store, the Company’s App Store and iBooks Store allow customers to discover and download applications and books through either a Mac or Windows-based computer or through iPhone, iPad and iPod touch® devices (“iOS devices”).
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The Company’s Mac App Store allows customers to easily discover, download and install Mac applications.
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The Company also supports a community for the development of third-party software and hardware products and digital content that complement the Company’s offerings.
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The Company believes a high-quality buying experience with knowledgeable salespersons who can convey the value of the Company’s products and services greatly enhances its ability to attract and retain customers.
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Therefore, the Company’s strategy also includes building and expanding its own retail and online stores and its third-party distribution network to effectively reach more customers and provide them with a high-quality sales and post-sales support experience.
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The Company believes continual investment in research and development (“R&D”), marketing and advertising is critical to the development and sale of innovative products and technologies.
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Apple Inc. | 2014 Form 10-K | 1 Business Organization The Company manages its business primarily on a geographic basis.
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Accordingly, the Company determined its reportable operating segments, which are generally based on the nature and location of its customers, to be the Americas, Europe, Greater China, Japan, Rest of Asia Pacific and Retail.
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The Americas segment includes both North and South America.
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The Europe segment includes European countries, as well as India, the Middle East and Africa.
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The Greater China segment includes China, Hong Kong and Taiwan.
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The Rest of Asia Pacific segment includes Australia and Asian countries, other than those countries included in the Company’s other operating segments.
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The results of the Company’s geographic segments do not include the results of the Retail segment.
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Each operating segment provides similar hardware and software products and similar services.
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Further information regarding the Company’s operating segments may be found in Part II, Item 7 of this Form 10-K under the subheading “Segment Operating Performance,” and in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 11, “Segment Information and Geographic Data.” Product...
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iPhone has an integrated photo and video camera and photo library app, and on qualifying devices, also includes Siri®, a voice activated intelligent assistant.
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iPhone works with the iTunes Store, the App Store and iBooks Store for purchasing, organizing and playing music, movies, TV shows, podcasts, books and apps.
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In addition to apps delivered with iOS, free downloads of iLife® and iWork® apps for iOS are available with all new iPhones.
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iPhone is compatible with both Mac and Windows personal computers and Apple’s iCloud services which provide synchronization of mail, contacts, calendars, apps, music, photos, documents and more across users’ devices.
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In September 2014, the Company introduced iPhone 6 and iPhone 6 Plus that feature larger 4.7-inch and 5.5-inch Retina® HD displays and support for Apple Pay.
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iPad iPad is the Company’s line of multi-purpose tablets based on Apple’s iOS Multi-Touch operating system, which includes iPad Air™ and iPad mini™.
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iPad has an integrated photo and video camera and photo library app, and on qualifying devices, also includes Siri.
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iPad works with the iTunes Store, the iBooks Store and the App Store for purchasing, organizing and playing music, movies, TV shows, podcasts, books and apps.
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In addition to apps delivered with iOS for qualifying devices, iLife and iWork apps for iOS are available as free downloads with all new iPads.
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iPad is compatible with both Mac and Windows personal computers and Apple’s iCloud services.
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In October 2014, the Company introduced iPad Air 2 and iPad mini 3 that feature a Retina display, Touch ID™ and support for Apple Pay.
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Mac Mac is the Company’s line of desktop and portable personal computers.
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Macs feature Intel microprocessors, the OS X operating system and include Mail, Safari® web browser, Messages, Calendar, Reminders, Contacts and the iLife apps.
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The Company’s iWork apps are also available as free downloads with all new Macs.
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The Company’s desktop computers include iMac®, Mac Pro® and Mac mini.
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The Company’s portable computers include MacBook Pro®, MacBook Pro with Retina display and MacBook Air®.
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In October 2014, the Company introduced the 27-inch iMac with Retina 5K display with improved performance, power efficiency and visual quality; and updated the Mac mini.
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iPod The Company’s iPod line of portable digital music and media players includes iPod touch, iPod nano® and iPod shuffle®.
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All iPods work with iTunes® to purchase and synchronize content.
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iPod touch, based on the Company’s iOS Multi-Touch operating system, is a flash-memory-based iPod with an integrated photo and video camera and photo library app, and also includes Siri.
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iPod touch works with the iTunes Store, the App Store and the iBooks Store for purchasing and playing music, movies, TV shows, podcasts, books and apps.
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In addition to apps delivered with iOS, iLife and iWork apps for iOS are available as free downloads for all new iPod touch products.
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iPod touch is compatible with both Mac and Windows personal computers and Apple’s iCloud services.
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Apple Inc. | 2014 Form 10-K | 2 iTunes and the iTunes Store Apple’s iTunes app, available for iOS devices, Mac and Windows personal computers and Apple TV, keeps users’ music, movies and TV shows organized in one place.
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iTunes is integrated with the iTunes Store, the App Store, the iBooks Store, iTunes U® and iTunes Radio™.
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The iTunes Store allows customers to purchase and download music and TV shows, rent or purchase movies and download free Podcasts.
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The App Store allows customers to discover and download apps and purchase in-app content.
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The iBooks Store features e-books from major and independent publishers.
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iTunes U allows users to download free lectures, videos and more from top universities, museums and other institutions.
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iTunes Radio provides a free Internet streaming service that allows users to personalize radio stations featuring music from the iTunes Store.
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In July 2014, the Company acquired Beats Music, LLC, which offers a subscription streaming music service that offers a curated listening experience and complements the Company’s other music services and offerings.
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Mac App Store The Mac App Store allows customers to discover, download and install Mac applications.
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The Mac App Store offers applications in education, games, graphics and design, lifestyle, productivity, utilities and other categories.
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The Company’s OS X operating system software and its iLife, iWork and other application software titles are also available on the Mac App Store.
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iCloud iCloud is the Company’s cloud service which stores music, photos, applications, contacts, calendars, mail, documents and more, keeping them up-to-date and available to multiple iOS devices, Mac and Windows personal computers and Apple TV.
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iCloud services include iTunes in the Cloud, iCloud DriveSM, iCloud Photo Sharing, Family Sharing, Find My iPhone, iPad or Mac and iCloud Backup for iOS devices.
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Users can sign up for free access to iCloud using a device running qualifying versions of iOS or OS X. Apple Pay In October 2014, the Company released Apple Pay in the U.S., a new service aimed at making mobile payments easy, secure and private.
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Apple Pay works with iPhone 6, iPhone 6 Plus, iPad Air 2 and iPad mini 3.
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Apple Pay will also work with the newly announced Apple Watch upon its expected availability in early calendar year 2015.
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Operating System Software iOS iOS is the Company’s Multi-Touch operating system that serves as the foundation for iOS devices.
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Apps delivered with iOS for qualifying devices include Safari web browser, FaceTime® video calling, Maps, Mail, Contacts, Calendar, Clock, Weather, Calculator, Notes, Reminders, Stocks, Compass and Messages.
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Devices running iOS are compatible with both Mac and Windows personal computers and Apple’s iCloud services.
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In September 2014, the Company released iOS 8, which provides new features for Messages and Photos, predictive typing for Apple’s QuickType™ keyboard and a new Health app.
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iOS 8 also introduced Family Sharing, which enables easier sharing of purchases, photos and calendars within the same household.
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OS X OS X, the Company’s Mac operating system, is built on an open-source UNIX-based foundation and provides an intuitive and integrated computer experience.
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OS X Yosemite, released in October 2014, is the eleventh major release of OS X.
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Support for iCloud is built into OS X so users can access content and information from their Macs, their iOS devices and other supported devices and access downloaded content and apps from the iTunes Store.
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Apps delivered with OS X include Mail, Safari web browser, Messages, Calendar, Reminders, Contacts, Maps, iBooks® and the iLife apps.
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OS X Yosemite incorporates additional continuity features including Handoff, which allows users to start an activity on one Mac or iOS device and pass it to another Mac or iOS device.
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Apple Inc. | 2014 Form 10-K | 3 Application Software iLife iLife for Mac is the Company’s consumer-oriented digital lifestyle software application suite included with all Mac computers.
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iLife features iPhoto®, a digital photo application for storing, viewing, editing and sharing photos; iMovie®, a digital video editing application; and GarageBand®, a music creation application that allows users to play, record and create music.
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The Company also has Multi-Touch versions of these iLife applications designed specifically for use on iOS devices.
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iWork iWork for Mac is the Company’s integrated productivity suite designed to help users create, present and publish documents, presentations and spreadsheets.
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iWork includes Pages® for word processing and page layout, Keynote® for presentations and Numbers® for spreadsheets.
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The Company also has iOS Multi-Touch versions of each iWork application designed specifically for use on iOS devices.
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Other Application Software The Company also sells various other application software, including its professional line of applications: Final Cut Pro®, Logic® Pro X and its FileMaker® Pro database software.
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Accessories The Company sells a variety of Apple-branded and third-party Mac-compatible and iOS-compatible accessories, including Apple TV, headphones, cases, displays, storage devices and various other connectivity and computing products and supplies.
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In July 2014, the Company acquired Beats Electronics, LLC, which makes Beats® headphones, speakers and audio software.
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Apple TV Apple TV connects to consumers’ high definition TVs and enables them to access iTunes content directly for streaming HD video, playing music and viewing photos.
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Content from iTunes Radio, Beats Music™ and other media services, including Netflix, YouTube, Flickr, Hulu Plus, Vevo, MLB, NBA and NHL is available on Apple TV.
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Apple TV allows streaming iTunes content from Macs and Windows personal computers through Home Share and through AirPlay® from compatible Mac and iOS devices.
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Compatible Mac and iOS devices can also mirror their device screens as well as stream and play games on Apple TV.
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Apple Watch In September 2014, the Company announced Apple Watch, a personal electronic device that combines new precision watch technology with an iOS-based user interface created specifically for a smaller device.
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Apple Watch features Digital Crown, a unique navigation tool that allows users to seamlessly scroll, zoom and navigate.
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Apple Watch enables customers to communicate in new ways from their wrist and features Force Touch, a technology that senses the difference between a tap and a press and allows users to access controls within apps.
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Apple Watch is expected to be available in early calendar year 2015 and will be compatible with iPhone 5 and newer iPhone models running the latest version of iOS 8. iOS and Mac Developer Programs The Company’s iOS and Mac Developer Programs support app developers with the development, testing and distribution of iOS a...
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Development tools included with the Company’s Developer Programs include Xcode®, the Company’s integrated development environment for creating apps for iOS devices and Mac.
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Xcode includes project management tools; analysis tools to collect, display and compare app performance data; simulation tools to locally run, test and debug apps; tools to simplify the design and development of user interfaces; Swift™, the Company’s new programming language for both iOS and OS X introduced in June 201...
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The Company’s Developer Programs also provide access to multiple development resources including the Company’s Developer Forums, extensive technical documentation and sample code.
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The Company’s Developer Programs also provide developers with access tools and information for submitting their apps to the App Store and the Mac App Store.
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Apple Inc. | 2014 Form 10-K | 4 Product Support and Services AppleCare® offers a range of support options for the Company’s customers.
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These include assistance that is built into software products, printed and electronic product manuals, online support including comprehensive product information as well as technical assistance, the AppleCare Protection Plan (“APP”) and the AppleCare+ Protection Plan (“AC+”).
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APP is a fee-based service that typically includes two to three years of phone support, hardware repairs and dedicated web-based support resources.
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AC+ is a fee-based service available in certain countries for iPhone and iPad.
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AC+ offers additional coverage under some circumstances for instances of accidental damage in addition to the services offered by APP.
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Markets and Distribution The Company’s customers are primarily in the consumer, SMB, education, enterprise and government markets.
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