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Legal Proceedings Item 4.
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Mine Safety Disclosures Part II Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6.
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Selected Financial Data Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk Item 8.
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Financial Statements and Supplementary Data Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Item 9A.
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Controls and Procedures Item 9B.
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Other Information Part III Item 10.
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Directors, Executive Officers and Corporate Governance Item 11.
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Executive Compensation Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13.
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Certain Relationships and Related Transactions and Director Independence Item 14.
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Principal Accounting Fees and Services Part IV Item 15.
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Exhibits, Financial Statement Schedules The Business section and other parts of this Annual Report on Form 10-K (“Form 10-K”) contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties.
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Many of the forward-looking statements are located in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical o...
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Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms.
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Forward-looking statements are not guarantees of future performance and the Company’s actual results may differ significantly from the results discussed in the forward-looking statements.
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Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors,” which are incorporated herein by reference.
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Each of the terms the “Company” and “Apple” as used herein refers collectively to Apple Inc. and its wholly-owned subsidiaries, unless otherwise stated.
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The Company assumes no obligation to revise or update any forward-looking statements for any reason, except as required by law.
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PART I Item 1. Business Company Background The Company designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players, and sells a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications...
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The Company’s products and services include iPhone®, iPad®, Mac®, iPod®, Apple TV®, a portfolio of consumer and professional software applications, the iOS and OS X® operating systems, iCloud®, and a variety of accessory, service and support offerings.
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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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Unless otherwise stated, all information presented in this Form 10-K is based on the Company’s fiscal calendar.
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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 new products and solutions with superior ease-of-use, seamless integration, and innovative design.
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The Company believes continual investment in research and development, marketing and advertising is critical to the development and sale of innovative products and technologies.
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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 “iOS devices,” namely iPhone, iPad and iPod touch®.
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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 enhancing 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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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, Japan, Greater China, 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 Retail segment operates Apple retail stores in 13 countries, including the U.S. Each operating segment provides similar hardware and software products and similar services.
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The results of the Company’s geographic segments do not include results of the Retail segment.
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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, beginning in September 2013, free downloads of iPhoto®, iMovie® and iWork® apps for iOS became 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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The latest versions, introduced in September 2013, are iPhone 5c and iPhone 5s.
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iPad iPad and iPad mini™ are the Company’s line of multi-purpose tablets based on Apple’s iOS Multi-Touch operating system.
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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 and playing music, movies, TV shows, podcasts, books, and apps.
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In addition to apps delivered with iOS for qualifying devices, beginning in September 2013, iPhoto, iMovie and iWork apps for iOS became 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 2013, the Company announced iPad Air™, its fifth generation iPad, and iPad mini with Retina® display.
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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, Calendars, Reminders, Contacts and the iLife® suite of software apps.
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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® and MacBook Air®.
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Beginning in October 2013, the Company’s iWork productivity suite of apps for OS X became available as free downloads with all new Macs.
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iPod The Company’s iPod line of portable digital music and media players includes iPod touch, iPod nano®, iPod shuffle® and iPod classic®.
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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, beginning in September 2013, iPhoto, iMovie and iWork apps for iOS became available as free downloads for all new iPod touches.
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iPod touch is compatible with both Mac and Windows personal computers and Apple’s iCloud services.
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iTunes and the iTunes Store Apple’s iTunes app, available for both Mac and Windows personal computers, 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 and the iBooks Store.
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The iTunes Store allows users to purchase and download music and TV shows and to rent or purchase movies.
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The iTunes Store also includes hundreds of thousands of free Podcasts on a multitude of subjects.
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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 also features Genius mixes to find songs that go together and organize them into genre-based mixes and Home Sharing to allow users to stream content from one computer to another computer as well as to iOS devices and newer versions of the Company’s Apple TV.
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In September 2013, Apple introduced iTunes Radio™, a free Internet streaming service that allows users of iOS devices, Mac and Windows personal computers and Apple TV to personalize radio stations featuring music from the iTunes Store.
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Mac App Store The Mac App Store allows customers to discover, download and install Mac apps.
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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, documents and more, keeping them up-to-date and available to multiple iOS devices and Mac and Windows personal computers.
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iCloud’s features include iTunes in the Cloud; Photo Stream; Documents in the Cloud; Contacts; Calendar; Mail; automatic downloads and purchase history for content, applications and books; 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.
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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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iOS 7 is the current version and was released in September 2013.
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Apps delivered with iOS for qualifying devices include Safari web browser, FaceTime video calling, Maps with turn-by-turn directions, 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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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 Mavericks, released in October 2013, is the tenth 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 other Macs, their iOS devices and other supported devices and access downloaded content and apps from the iTunes Store.
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In addition to Mail, Safari web browser, Messages, Calendars, Reminders, Contacts and the iLife® suite of software apps, Mavericks also includes a new Maps app and a new iBooks app that both work with their iOS counterparts.
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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 customers 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 iPhone and iPad, and beginning in September 2013, both iPhoto and iMovie for iOS became available as free downloads with all new 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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Beginning in October 2013, the iWork suite of apps for OS X will be available as free downloads with all new Macs.
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The Company also has iOS Multi-Touch versions of each iWork application designed specifically for use on iOS devices and, beginning in September 2013, they all became available as free downloads with all new iOS devices.
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