Management Information System

Before we go ahead and analyze the issue related to information system, we would first have a
brief overview of the company which would enable us to view the overall impact of information systems
in the organization and its relevance to the different activities undertaken by the company
Apple as a company was incorporated on 1 st April 1976 by three persons namely Steve jobs,
Steve Wozniak and Ronald G Wayne. The company received its first order for computers from Byte
Shop Computer Store for 50 computers. However, the company did not have the financial depth that was
required to match the big players of that time like IBM, HP, Atari and Commodore. Luckily, they were
able to raise venture capital from Mike Markkula and set up their new corporate HQ in Cupertino,
California.
Apple was successful with the next product which was launched and branded as Apple II which
was in production for a record amount of time from April 1977 to November 1993. This has been the
successful product and created the pathway for the growth of the organization and by 1980 the company
several thousand employees with a market share of 50% and was selling computers internationally.
The above factors created the operational and management hurdles as there was lack of clarity
and communication between the different board of directors were focused to bring in efficiency and make
the company a stereotypical one was progressively implemented by the new investors and the new
employee which led to a strong divide between the old and new set of employees. In this phase the
organization underwent a change from being a functional organization to a product oriented organization.
There by segmenting and creating different departments based on product lines like Apple II, Macintosh,
Apple III, Lisa, manufacturing, sales and services, human resources, administration, etc.,.

Let us understand the corporate structure in the organization as that would provide us with an
understanding of where the communication gap exists and how the same can be addressed through the
effective deployment of management information systems.
The companys core and support activities are listed below for ease of understanding of the
functions that are undertaken by the company.

Introduction
Today the society is changing from an industrial society to an information society. Modern
societies are driven by technology and large organizations which operate on trans-national networks
without any geographical boundaries, all this require highly efficient communication systems. Hence,

Management Information Systems can be described as the key differentiators which are affecting the way
companies are differentiating their products and services.
They further describe Management Information System as the system that monitors and
retrieves data from the environment, captures data from transactions and operations with the firm, filters,
organizes and selects data and presents them as information to managers, and provides the means for
managers to generate information as desired. Modern management is undergoing changes which can be
witnessed in progressive companies where the management is becoming system oriented, information is
made available to managers as needed, and planning and control are increasingly tied to operational
systems of implementation due to availability of information.
Importance of Information
There are different attributes to information like the purpose for which information is being
collected, mode and format of information, efficiency of the information, frequency of information
reporting, cost of information gathering and the reliability and precision of the information being
gathered.
Any organizations context has a definitive influence on the problems faced and solutions
provided. The problems are shaped by the constraints the organization faces and the organization structure
that is in place in the origination. When unanticipated events occur in the problem solving process we
identify them as contingencies. This indicates that the organizations structure, its technology or technical
process and its environment will all be significant elements of the context affecting its decision-making.
Strategic Information Management
On a strategic information management level Agarwal and Sambamurthy state the following
principles that are required to be borne in mind when the information system management is planned and
they state there is no one best IT organizational structure, however it needs to be adaptive and should

provide value proposition, synchronization of the model to the current situation faced in the organization,
organize according to the new developments in the organization.
There have been recent developments with regard to Strategic Information Planning (SIP),
however the key focus is still replied on the planning process rather than the result i.e., information
strategy. The other aspect being discussed is the element of fusion between the business strategy and IT
governance strategy in the overall blueprint which is developed for the organization.
Virtual Business Organization
The other development which is being witnessed is in the area of virtual business or virtual
organization which brings in a third dimension to the issue of information management apart from the
above issues of communication and strategy. A virtual organization has been defined by Porter as a
collection of business units in which people and work processes from the business units interact
intensively in order to perform work which benefits all. Even though the virtual organization concept is
not too prevalent however the elements of the concept are being picked up by different organizations in
segments to enable the utilization of the same to build comparative competitive advantages in the market
place through the leveraging of the different information technology systems that are currently available.
The above concepts give guidance on the multitude of issues that are being faced by the
organization. And shows how an effective deployment of managing information system is required to
ensure that the plethora of data which is being collected can be assimilated to the required managers in an
effective and timely manner.
Information Systems in Apple Inc
The Organization structure of Apple with its global presence and different domains in the
electronics industry would require a system of information dissemination which enables availability of

right information to right people and at the right time, to ensure that the business decisions undertaken by
them are consistent and backed with appropriate availability of information.
Let us have a look at how Apple is managing their information system and technology that is used
by the company to managing this mammoth task of information management.
Apple's main objective has always been to be the innovation leader. The same philosophy extends
even to the manner in which they manage their internal communication which showcases their
superiority. In accordance with this concept they have most of the processes which are virtualized, as the
company believes that virtualization is the factor which will provide the company with a competitive
advantage in the market place in future.
Apple's intranet provides the required platform for undertaking this process and this intranet the
comfort of their desktop. From an external linkage point of view the company has an extranet which
enables the company to interact with the key suppliers and developers of Mac based applications. This
enables the organization to build a seemingly unlimited 'value chain' in the information domain by
creating a virtual link between the suppliers and the production units which are in turn linked to the retail
store. The information from the retail stores is communicated to the customer service department which
already has access to other information about the supplier and the production details. Hence, there exists a
vast amount of information to enable the company to offer services at the 'click of the mouse' (in terms of
information availability, the seemingly end to end link up of all parties involved in the value chain has
enabled the company to offer customized services to its customers).
The company has undertaken a tie-up with Utility Computing whereby they are reducing the
amount of computer assets that the company owns and offering payment for the services undertaken this
concept is gaining momentum and is called as SaaS (Software as a Service). This has enable the company
to achieve the differential with other competitors in the market place and made the overall information
management system leaner and effective.

Conclusion
From the above discussion it can be seen that the segment of MIS is highly important and can
provide a substantive advantage in the market place to the company if administered effectively. At the
same time if the same is not planned and positioned effectively the company faces the risk of losing out
on the opportunities and at times may incur serious losses due to decision being taken without availability
of appropriate information to the managers. Hence, it can be stated that MIS plays a crucial role in the
overall strategic fit of the company.

Control and Supervision System

Business operational plan of Apple Inc
Apple Inc. designs manufactures and markets the personal computers along with other mobile
communication services, music and digital players. It also provides hardware, software and networks
solutions and peripherals. Apple Inc. sells its products throughout the world on its retail stores, online
stores, through the third party wholesalers and its direct sales force. It also deals with the variety of
Macintosh i.e. iPhone & iPod etc. It provides the services of the complete software solutions on its iTunes
stores. Its consumers are those who purchase its products directly, enterprises, educator and governments.
This company is California based and founded in 1977. It has capability to design and manufacture its
own operating system.
Strategic plan sets up the business plan of a company while business plan in turn establishes the
business operation plan. Operational plan is the key to run the entire business of company. Operational
business plan covers the all areas of company including the finance, manufacturing, internet, operations,
R&D, human resources and marketing. Apple Inc. was known because of its lenient business thinking.
Apple Inc. has the design, marketing and manufacturing services. Company develops designs and markets
the musical players with important accessories. The business of Apple Inc. is managed on geographic

basis. There are five operating segments of Apple Inc. such as America, Europe, Japan, retail and others.
In US, Canada, UK and Japan Apple owned stores are currently operating. Like other organizations Apple
Inc. all the departments are formed by the placing the similar functions in the groups. As described before
the main divisions of Apple Inc. human resource, finance, marketing and productions are adopted by the
functional approach. In each division the functional subsystem and departments create hierarchies.
Operational management is linked with the production division's activities.
The people in Apple Inc. are grouped together on the basis of their expertise and resources. It
enabled the Apple Inc. to learn from its functions. The present structure in Apple Inc. has focused upon
those activities which reduce the costs and increase the flexibility in its operations. The managers in
Apple Inc. have a greater control of the organizational activities and avoiding the tall and other several
hierarchies. A relative flat structure of the Apple Inc. has decentralized the authorities and responsibilities
of its management. The managers and employees at lower levels are encouraged to take part in fostering
the company's strengths. The advantages of decentralization are numerous i.e. enhancing the planning,
decision making and control processes. Apple Inc. has focused on its marketing operations on the major
business areas like iPod and iTunes. The marketing department shows a great responsiveness to the
outside world. The finance treasury division of Apple Inc. provides the financial policy to company. This
department is responsible to handle the international capital transactions of company, liquidity
guaranteeing and risk management. In Apple Inc. the role of the financial manager is crucial for the
strategic management. The capital required for the R&D is raised by the Finance division which
maintains the innovation position of the Apple Inc. Internal problems of Apple Inc. were in the form of
the sale force accessing directly to corporations. Apple Inc. relied on the 300 manufactures while IBM
had 6000 to 7000 direct salesman. However the Apple Inc. has focused to establish more sales staff. Many
issues concerning to these sales person were noted regarding the prices of products. Apple Inc. has also
marketing problem as it failed to communicate the Macintosh's business image in market. The fact that
marketing strategy was not according to requirements and did not make it more famous in market; it also

did not focus upon the technology. Products are manufactured on the basis of customer's needs. Apple Inc.
needed the fundamental importance of getting close to market. Apple Inc. possessed the organizational
structure which too had the management problems. The production and shipment problems exist in Apple
Inc. as the IBM its supplier experienced the manufacturing problems and delayed the shipment of various
products. In a market the speedy delivery of products is critical. Due to the Apple's key dependency on
other companies put it at the competitive disadvantage. Human Resource in Apple Inc. has administrative
tasks such as meetings, conferences, special projects and seeks the solution for the fast paced store
environment.
Discuss both the internal and external factors that impinge on the business operations plan.
Apple Inc. has faced the serious challenges during the last 30 years but recovered from those
serious situations with advent of innovation. Apple Inc. faces the threat of competition because of free
services in market. A good business achieves the market share by creating better legal services to
customers. It can be compared with the bottle water which is better in quality as compared to tape water
which is in approach of every person. However there is legal competition ahead in market. No company
was successful to attach the market the before the Apple Inc. did so. Better service is directly related with
the new and better technology. Roxio was the first company which followed the Apple Inc. to produce the
products on the concept iTunes Music Store. Sony and Microsoft are other big players of market to
download the services. On the other hand Dell Computers are partnering with MusicMatch. Traditional
retailers like Amazon and Wal-Mart have presented their own plans. Apple Inc. is facing the competition
from these competitors and profiting the leading position in market. Copy rights issues are also concerned
with Apple Inc. Apple Inc. faces the issues of jobs as a part of their system. Sales force for the direct
access to corporation is required for the success of business operation plan. IBM has the direct
salespeople more than 6000 while Apple Inc. relied only on the 300 manufacturers' representatives. The
reason behind the small number of sales force may be the selling Macintoshes at lower prices as
compared to dealers.

Economic Conditions & Apple Inc.

Economic conditions of world impact directly on the performance and financial results of Apple Inc.
investor must not consider the historical trends for the future performance of Apple Inc. there are several
reason behind this which pose the risks on business of Apple Inc. Uncertainty about the current global
economic conditions are also posing threats because business could not continue due to tight credits,
negative news about finance, decline in asset values. Apple Inc. sets the prices of its products to
consolidate the Dollar's value. Macroeconomic factors along with other factors affect Apple's business
operation plan. The demand can be influenced by the increase in prices of fuel and energy, condition of
mortage & real states markets, consumer's confidence and health & labour costs. These economic factors
adversely affect the demand for company's product. It also affects the operating results and financial
conditions of Apple Inc.
Impacts of environmental and technological changes on the business plan of Apple Inc.
Apple Inc. has made efforts to satisfy its stakeholders in various ways. It included all the
environmental issues for its corporate governance. It has satisfied the employees, local communities and
general public by minimizing the environmental impacts on its entire business operations; integrated the
sound environmental, safety management and health practices. The environmental mission statement of
Apple Inc. has integrated all above mentioned practices into all business operations to ensure that it offers
technologically innovative products. Apple Inc. aims to communicate on the policy which provides the
benefits of environmental consciousness, safety maximization, energy efficiency and health protection to
its various stakeholders. In the HRM objectives Apple Inc. has adopted the strategies because of the
consumer's preferences as the external environmental force. The HRM of Apple Inc. has established the
partnership agreements to keep the trust and fairness. The recruitment policy of the HRM is modified in
the ways to adapt the external changes in environment. Therefore the higher number of skilled staff is
recruited in the area of web development; web is considered a preferred medium for the technology

professionals for applications. A positive work environment has proved that Apple Inc. is outstanding for
the visionary products. The organizational competency of Apple Inc. is increased by the HRM. Apple the
Inc. is in an exclusive position. It has produced both software and hardware; it cannot be analyzed only
the PC manufacturing company. It is also providing the software solutions, server producer and online
contents.
Technology Advancement
The changes in technology has affected the barriers of entry and impacted the business operations
of Apple Inc. The changes in digital music industry are working now on common format to make them
available for the music players. The reason behind the limiting the download contents is to determine the
user's acceptance of Apple's product. Bundle of solutions are provided by the Apple Inc. with refined and
good products. By providing high quality products to end users the technology sector is making changes
rapidly. These are the diversified efforts which Apple Inc. keeps its design and innovation more focused
with the use of best performance and prices according to the external and internal environmental changes.
Due to its distinctive competencies like product design, innovation, educational skills and digital
entertainment; company has acted as a leader in the digital lifestyle. Apple Inc. has used its strengths for
the purposes of creativity, technological development and innovation. It has gained competitive advantage
over other companies in the industry because it offers multiple products with lower values. Organizational
structure and control system of Apple Inc. improved the information and knowledge availability. For the
Apple Inc; innovation and technology are the key driving forces of its mission and strategy. For the
effective operation management system IT is a driving factor and management information system is the
basic requirement for the strategic development. Efficiency of operation management is improved by the
use of IT as it increases the quality and availability of information and leads to cost saving. Apple Inc. is
using the SAP and ERPs systems to speed up the customer's orders. Apple Inc. has implemented the i2
technologies

Importance of good business operations planning to the overall success of the business at Apple Inc.
Apple Inc. has many successful factors that determine its success in key areas of the operations.
An important factor that is apparent is about the vision of the organization. It is true that creative energy
always begins with vision. These organizations impact significantly on the world. Apple has a very clear
and purposeful vision which can be seen through the innovative products for the last many years. The
main purpose of the Apple Inc. was to develop the computers for the world and making contribution to
the world by its advance technology products. Beside this vision Apple Inc. takes further steps of actions
which are practiced throughout the organization. In the Apple Inc. employees were able to lay the
foundations to achieve the long term goals. They were able to start the business at small scale and
contributed at a higher level. The company acted upon the Kotter's model and understood the potential
uses. The success of the Apple Inc. is attributed to the capability of the company making refinements and
building the more powerful products. The company has changed the core nature of the business. The
Apple Inc. innovated the (GUI), file folder and desktop metaphor. Kotter's 7th step manifests by using the
credibility to make changes in system, policies and structures. Apple uses the core competencies which
the employees have acquired through redefining the market segmentation. Apple has met many successes
and overcome the challenges. Apple Inc. has made changes and implemented new policies because of
changing trends of computer markets. Apple Inc. is a computer technology which is best known due to its
innovative structure. It is focusing upon the production of personal computers. In the advent of evolving
technology it has shifted into the electronic market. Apple Inc. operates its business in more than 170
retail stores in US, Japan, UK and Canada. It has produced more friendly computers for the consumers.
All of the achievements at Apple Inc. are attained through the people who design and develop the
products and staff at the retail stores. Why is the business operation plan important at Apple Inc? This
business operation plan is important because it generates the steady increasing revenues and sending its
products in the big markets of the world. Due to its good leadership the Apple Inc. achieved the high
profile. Three manufacturing facilities are shaping the foreign operation in countries like Ireland and

Singapore. Due to its internal strengths and successful business operation Apple Inc. has become a
competitive company. It has footed in the computer market with an innovative style in the computer
market. It production system is well handled as the operating system is free of all tangles of the Microsoft
operating systems. In the physical appearance, usability and specifications; it has given a large degree of
control to company. Apple Inc. encourages the R&D environment and constantly releasing the products as
seen in the latest Mac mini and iPod. It has made the Apple Inc. a big innovative company and brings the
creative and new ideas in the computer market. Capital Structure: Corporate policy has yielded good
results. Apple has paid all the debts which suggested that desired operations of company and growth of
company by equity and not by the debt.
Managerial qualities and resources necessary for effective business operation planning
The issues in quality of products attracted the attention of business. The management concept is
rendered by the wave of successful entrepreneurship. Top managers are committed to make decisions
before communicating fully with all those who are involved in it. When subordinates ask for the decision
the top managers think about the organizational response towards the decision for strategic plan. Ways of
decision making enhance the business operations and credibility throughout the organization Apple Inc.
People love to purchase the products of Apple Inc. because of power, easier way to use and reliability.
The business managers at Apple Inc. ensure the delivery of the products to companies according to their
requirements. Business customer contacts the business managers and long term relationships are
established between them Apple Inc. management has the ability to sell its products having no supply
chain system. It earn the revenue by the selling the iPod devices and Mac computers. Its iTunes virtual
stores are generating the revenue more than $ 1 billion every year. The managers at Apple Inc. face the
incentives of using the strategies to control the earnings in many traded companies. The managers are
allowed to purchase the stocks. In this way the staff at Apple Inc. is encouraged. The management system
of Apple Inc. has policies and procedures, responsibilities and roles of its managers. For example a best
health management system is maintained by the concerned managers to ensure the safety and health of its

employees. If any inadequacy is seen in this system then top managers adopt the corrective actions
including the verification through audit processes. Apple procurement managers are responsible to
manage the business relationship with suppliers and coordinate the Apple's supplier responsibility auditor.
Apple Inc. has five divisions to manage the products and marketing departments of the company. These
five divisions are responsible to evaluation and manufacturing of the devices, software and hardware of
computer system. The four support divisions also work to handle the marketing and post sale products. A
new position of Chief Operation Officer was created by Scully to centralize the operations and involving
the senior management in the daily business decisions. Human Resource (HR) is responsible for the
safeguarding the most valuable assets of the Apple Inc. It handles the many programs of the company to
achieve the company's goals. Human resource at Apple Inc. is also responsible to reach at the needed
resources. The Apple Inc. has six important valued creation functions including the marketing, R&D,
finance, Human resource management, information systems and operations and logistics. The chain of
activities required to transform the inputs into outputs are primarily concerned with actual design,
manufacturing, delivery, marketing of products and customer support activities. The ultimate task of the
R&D resource at Apple Inc. includes the new innovation and use of technology which meet the
customer's requirements. Information system at Apple Inc. is an important asset which provides the
business assisting facility. For the success of the business operation plan the information system is a core
to keep the business run online without any obstacles. Other valuable resources which have potential
powers for the customers as well as the management at Apple Inc. include the servers which distribute the
information about Apple's products and create new internet resources for the mailing list, online feedback
and further open the communication lines. From the above discussion it can be concluded that Apple Inc.
is a well known development and business company of the world. Its success lies in its business operation
plan which indeed depends upon the various necessary actions taken from the design of the product to
sale of the product.

APPLE FINANCIAL ANALYSIS:

PERSONAL COMPUTERS
Apple Computers has a rapid growth, with sales and earnings expanding at a faster rate than firms
in other industries. Apple participates in several highly competitive markets, including personal
computers with its Macintosh line of computers, consumer electronics with its iPod lines of digital music
and distribution of third party music through its new iTunes Music Store. Apple is widely known for its
innovation in personal computing as well as an emerging leader in the market for distribution of digital
music.
In 1976, Steve Jobs, Steve Wozniak and Ronald G. Wayne founded the Apple Computer
company. Their first formal business plan set a goal to grow to $ 500 million in ten years. First step was
completion of preassembled circuit board named Apple 1.It didnt worked for Apple. Apple II came out at
a local tradeshow with easy to use floppy drive concept. Apple III, The Lisa, The early Macintosh came
into existence but Apple II was a big success and covered mass consumer market.
Rise in sales, led to increase in company size and by 1980, Apple had several thousand
employees and a market share of 50 %.In the first six years of business, Apple earnings grew from
$793,000 to $ 76,714,000. During 1980, public offering of share was decided by Apple. On the first day
the offered share price of $22 increased to $29.
During 1982 and 1985 Apples annual sales growth was an impressive 69%, 54% and 27% but in
the final years of Jobs tenure EBIT fell from $130m in 1983 to $91m in 1984 and ROCE was down from
93% in 1982 to 31% and 36% in 1984 and 1985. However, the five years from 1986 to 1990 was
apparently a financial golden age at Apple. From 1987, sales continued to grow at a compound rate of
31% and ROCE only dipped once below 100%. In 1987, ROCE was a 191%. By 1990 Apple had $1bn of
cash. Return on equity at Apple consequently ranged more modestly between 25% and 44%.
Apples return on capital at that time was much remarked. It was one of the most profitable
corporations in the US. Apple would compete against Microsoft in operating systems and HP in imaging,

but its Apple Computer 2 rival in the PC market in the early days was Compaq. Compaq was acquired by
Hewlett-Packard. After comparing Apple with Compaq in 1987, we can certainly say that Apples 191%
ROCE is much higher than Compaqs ROCE of 55%. Apple was selling its products at a significant
premium over competitors; even including Compaq at the top end of the IBM-PC range i.e. firm with
very strong competitive advantage in its market correspondingly delivers a much better return on capital.
In 1987, Apple's inventory was just 6% of sales whereas Compaqs was 23%. Since both firms were
selling through similar channels, this is evidence of much more efficient inventory management at Apple.
Apple had a tendency to launch new products when they had inadequate inventory available.
Apple was selling their products at a premium price but ending with lower EBIT margins. Apple
was ahead in terms of gross margin. A rapidly deteriorating gross margin in the final year was reversed in
1986 when gross margin rose 10 percentage points to 53.1%. It stayed at around this level throughout the
period 1986 to 1990. Compaq's gross margin was 10 percentage points lower. This gross margin
advantage at Apple does not fully reflect its price premium, i.e. some of the price advantage had already
been spent in higher production costs. Apple then proceeded to spend much more than Compaq on R&D.
In 1987 Apple was spending 37.3% of sales on R&D costs compared to Compaqs 22.3%.

BY 1987, Mac II was a solid hit, but Current CEO Sculleys style of getting things done made the
company more and more inflexible and slow-moving. Key decisions were postponed, reversed or avoided
completely. Also, various executives tried their own agenda. In 1991, Apple released its first generation of
PowerBooks, which were an instant success.
In 1994, Apple announced the PowerMac family, the first Macs to be based on the PowerPC chip.
Apple took its worst plunge ever in the winter of 1995/96. Misjudging the market Apple pushed low cost
PCs over mid range PowerMacs and failed to make a profit at all. Apple posted $68 million loss a quarter.
ROCE shows a negative return of 11%, 28 % and 16% during 1996/98.
In late 1996, Apple made an industry shocking announcement of acquiring NeXT and return of
Steven Jobs. He announced an alliance with Microsoft, one of the Apples greatest rivals. The company
reached new heights financially. Till 1990 the company focused its attention on hardware and software
but later in the years it also focused on operating its own operating system (OS) bundled with Mac, and
many peripherals. This proved to be the add on to the financial profit for the company as it allowed Apple
to sell its premium products at a competitive price making around 50% profit in this.
Today, Apple designs, manufactures and sells personal computers, mobile communication
devices, portable music players, accessories, and software & networking solutions. In addition, Apple
sells many peripheral products including printers, storage devices, computer memory, digital music and
videos, and still cameras. The company also provides application and internet software.
Apple became leading worldwide PC client vendor in Q4 2011. They shipped over 15 million
iPads and 5 million Macs representing 17 % of the total 120 million client PC shipped globally. Among
the top five PC vendors, only Lenovo managed to increase its market share by relatively two points
comparing to Apple with six points gain.
Apple announced its earnings for its first fiscal quarter of 2012. Its revenue amounted to $46.33B
in Q1 with earnings of $13.87 per share. The companys net profit in Q1 was $13.06B. 37 million iPhones

and 15 million iPads were sold in the first fiscal quarter of 2012, making this quarter Apples most
successful one ever. Apple also saw Mac sales climb to 5.2 million. The only decline in sales was the
iPod, which declined 21% year-over-year to 15.4 million units sold.
APPLE TABLET BUSINESS
Apple released the first iPad in April 2010, selling 300,000 units on the first day and selling 3
million in 80 days. During 2010, Apple sold 14.8 million iPads worldwide, representing 75% of tablet PC
sales at the end of 2010. By the release of the iPad 2 in March 2011, more than 15 million iPads had been
soldselling more than all other tablet PCs combined since the iPad's release. In 2011, it took
approximately 73% of the tablet computing market share in the United States. During the fourth quarter
of 2011, Apple sold 15.4 million iPads.
Apple's CEO Steve Jobs unveiled the iPad 2, the second generation of the device, at a March 2,
2011, press conference, despite being on medical leave at the time. About 33% thinner than its
predecessor and 15% lighter, the iPad 2 has a better processor; a dual core Apple A5 that Apple says is
twice as fast as its predecessor for CPU operations and up to nine times as fast for GPU operations. The
iPad 2 includes front and back cameras that support the FaceTime video calling application, as well as a
three-axis gyroscope. It retains the original's 10-hour battery life and has a similar pricing scheme.
Total iPad units sold in the recently concluded first quarter of 2011 were 7.3 million, up from the
previous quarters sale of 3.0 million units. We believe that the international roll-out will lead to increased
revenues and higher margins from additional sales.
Financial results for its fiscal 2011 third quarter ended June 25, 2011. The Company posted
record quarterly revenue of $28.57 billion and record quarterly net profit of $7.31 billion, or $7.79 per
diluted share. These results compare to revenue of $15.70 billion and net quarterly profit of $3.25 billion,
or $3.51 per diluted share, in the year-ago quarter. Gross margin was 41.7 percent compared to 39.1
percent in the year-ago quarter. International sales accounted for 62 percent of the quarters revenue.

The company reported revenues of $28.27 billion, up almost $7 billion from the year-ago quarter.
Earnings per share came in at $7.05. Gross margin was 40.3 percent, versus 36.9 percent in the year-ago
quarter. The results represent the best-ever September quarter for Apple. Mac sales in the quarter were
4.89 million; iPads were 11.12 million and iPhones came in at 17.07 million, even noting that the iPhone
4S did not arrive in time to impact the Q4 results.
For the full fiscal year 2011, revenues were $108B and earnings were $26B. Apple's stock closed
today at $422.24, and is currently down to $404.50 in after-hours trading. iPad 2 has been available for
purchase, depending on stock availability, since March 11, 2011, at Apple retail stores in the United
States, as well as to American customers shopping online at Apple's retail website. The iPad 2 was
released internationally in 25 other countries, including Australia, Canada, France, Germany,
Mexico and the United Kingdom, but not Japan as originally scheduled due to the earthquake and
tsunami. The successor to the iPad 2 was unveiled on March 7, 2012 by Apple CEO Tim Cook at
the Yerba Buena Center for the Arts. The new iPad sports the new dual core A5X processor with quadcore graphics and a Retina Display with a resolution of 2048 by 1536 pixels. As with previous iPads,
there are two models, in this case a Wi-Fi only model and a Wi-Fi + 4G LTE model. Apple sold 15.4
million iPods, a 21 percent unit decline from the year-ago quarter.
MUSIC BUSINESS:
In November 2001, Apple launched its first iPod, a portable digital music player based on the
MP3 compression standard. Five years later, it offered a full line of MP3 player from the iPod shuffle
(starting $69) which randomly played up to 240 songs, to the iPod Nano (starting at $149), which stored
up to 1000 songs: to the video iPod, whose 60 GB version ($399) could hold 15000 songs, 2500 photos,
or 150 hrs of video. As a result it became an icon of Digital age.
In the fiscal year September 2005, Apple reported revenues of US$13,931M, an increase of
68.3% over the preceding year. The Operating Income in FY2005 was US$1650M, an increase of 406.1%

over the 2004 figure. Net Income also similarly increased by 383.7% in FY2005 to US$1335M. Total
Assets increased by 43.49% to US$11,551M. Total Liabilities increased by 37.36% to US$4,085M, but
Total Debt remained at US$0. Shareholders benefited in FY2005, as Shareholder's Equity increased by
47.08% to US$7,466M.
Several factors to explain the upward financial trend were the increase in net sales of iPods by
US$3.2B, which was a 248% increase. Other music related products and services also had an increase in
net sales of 223%. The company also experienced smaller increases in the net sales n retail, peripherals
and other hardware, Macintosh computers, and software, services and other sales. There were no
decreases in the net sales of all products, but Net sales per Macintosh and iPod fell.
In the quarter ending Dec 31, 2005 the company reported the largest earnings and revenue total in
its history. This result was due to sale of more than 14 million iPods which marked a 207% increase from
the previous year. During that time, Apple had sold 42 million iPods and the device claimed a 75% share
of U.S market for portable music player. In 2006, major rivals were Creative technologies, iRiver,
Samsung, and Sony but none of them had a couple percent of market share. Apple reported nearly $900
million in sales of iPod-related services and accessories in 2005. It also announces that 30 % of all the
new U.S cars would come with iPod-compatible audio systems.
The key element of iPod system was iTunes Music store. The first legal site that allowed music
downloads on a pay-per song basis; iTunes became the dominant online stores of its kind. Early in 2006,
it held around 83 % share of the market and as of February of that year I sold more than 1 billion songs.
Before the advent of iTunes Apple sold an average of 113,000 iPods per quarter by Dec 2003, but launch
sales shot up to 733,000 units and continued to rise.
In 2007 combined iPod and iTunes sales accounted for 45 % of total revenue of Apple. The
direct impact of iTunes on Apples profitability was far less impressive.

In 2008, music purchased in the US has jumped to 18% of the total, and they expect it to go up to 41% of
total sales over the next five years i.e. about 20% of all the music sold in the US is bought digitally. And
distorted-loop.com is doing a little reasoning from those numbers, since Apple's iTunes accounts for 70%
of US digital sales; distorted-loop.com has decided that Apple accounts for 12.6% of all music sold in the
US.
Fiscal

Q1

Q2

Q3

Q4

Year

Total (iTunes &

iPods)

2002
2003
2004
2005

125,000
219,000
733,000
4,580,000

57,000
78,000
807,000
5,311,000

54,000
304,000
860,000
6,155,000

140,000
336,000
2,016,000
6,451,000

376,000
937,000
4,416,000
22,497,000

2006

14,043,000

8,526,000

8,111,000

8,729,000

39,409,000

2007

21,066,000

10,549,00

9,815,000

10,200,00

51,630,000

2008

22,121,000

0
10,644,00

11,011,000

0
11,052,00

54,828,000

2009

22,727,000

0
11,013,00

10,215,00

0
10,177,00

54,132,000

2010

20,970,000

10,885,00

9,410,000

9,050,000

50,315,000

2011

19,446,000

0
9,020,000

7,540,000

6,622,000

42,628,000

Fiscal

Q1

Q2

Q3

Q4

321,168,000

Year

During FY 2012 first quarter which spanned 14 weeks the Company posted record quarterly
revenue of $46.33 billion and record quarterly net profit of $13.06 billion, or $13.87 per diluted share.
These results compare to revenue of $26.74 billion and net quarterly profit of $6 billion, or $6.43 per
diluted share, in the year-ago quarter. Gross margin was 44.7 percent compared to 38.5 percent in the
year-ago quarter. International sales accounted for 58 percent of the quarters revenue.
The Company sold 37.04 million iPhones in the quarter, representing 128 percent unit growth over the
year-ago quarter. Apple sold 15.43 million iPads during the quarter, a 111 percent unit increase over the
year-ago quarter. The Company sold 5.2 million Macs during the quarter, a 26 percent unit increase over
the year-ago quarter. Apple sold 15.4 million iPods, a 21 percent unit decline from the year-ago quarter.
MOBILE PHONE BUSINESS
Apple and its distribution partner AT & T mobility began selling the iPhone in late June 2007.
This was Apples bid to unite the iPod with a mobile phone service but the company real goal was to
reinvent the phone. The iPhone was multifunctional communication device the internet in your pocket
in Jobs word that shared many qualities with smartphones. It featured e-mail capability, web access and
text messaging, a calendar, an address book and other PDA function with 2-MP camera. The entire system
ran on a specially adapted version of Apples OS X platform.
Buyers of the iPhone during the first year of availability, paid $399 for an 8 GB model and $ 499
for 16 GB model. Jobs aimed to sell 10 million units of the device by the end of 2008. By June 2008,

consumer had bought about 6 million iPhones. iPhone gained a 19.5 % share of the U.S Smartphone
market during its first quarter of availability. Worldwide users bought about 120 million smartphones in
2007.
In July 2008, Apple invented iPhone 3G in 22 markets. Key difference was it supported 3G
network coverage.
Apple Inc. in the rst quarter achieved double-digit percentage growth in iPhone shipments and
posted the best performance among the Top 5 competitors.
No. 2-ranked Apple in the first quarter of 2011 shipped 18.6 million iPhones, up 14.9 percent
from 16.2 million in the fourth quarter of 2010. Apples increase represented the highest percentage
growth among the worlds Top 5 smart phone brands, with No. 5-ranked HTC coming in a distant second
given its 6.2 percent growth. Apples results also marked a standout performance in a smart phone market
that suffered a 1.5 percent sequential decline in shipments during the first quarter.
The smart phone market share of Apple in the first quarter was boosted by the introduction of its
first iPhone model with code division multiple access (CDMA) as well as by the addition of Verizon
Wireless as a carrier in the United States. Not only did this allow Apple to expand its target market and
boost shipments, it also placed additional pressure on rival smart phone brandsincluding Motorola,
Samsung, LG and HTCthat focus on Verizon Wireless as a major customer. With its concentration on
the U.S. market, Motorola was the one most impacted by Verizons addition of the iPhone, a factor
contributing to Motorolas 16.3 percent decline in shipments in the first quarter.
With shipments declining 14.5 percent during the first quarter from Nokia, the No. 1 smart phone brand,
Apple made major strides toward achieving market leadership. Apple in the first quarter trailed Nokia by
just 5.7 percentage points, compared to 12.2 points in the fourth quarter of 2010. Nokias smart phone
shipments fell to 24.2 million units in the first quarter, down from 28.3 million in the fourth quarter.

The companys agreement with Microsoft Corp. to make Windows Phone 7 its principal operating system
over the long term is having a negative near-term impact on its smart phone shipments. With the
announcement of the deal, Nokia eliminated the incentive for consumers to buy its existing smart phone
products, which are based on its Symbian and MeeGo operating systems. Meanwhile, the Microsoft deal
is unlikely to yield any products for nearly one year.
The decline in smart phone shipments in the first quarter represents the first sequential decrease
since the beginning of 2009. While many electronic products typically suffer a sales slump during the
beginning of the year following the peak selling sales season of the fourth quarter in the previous year, the
fast-growing smart phone has been immune to this phenomenon during most years. The reduction of
shipments reflects inventory control efforts in the smart phone market, rather than weakening consumer
demand. This decline does not change the IHS iSuppli forecast of 60 percent growth in worldwide smart
phone shipments for the entire year of 2011.
Apple announced fiscal Q4 2011 earnings, which disappointed investors as Apple could only sell
17 million iPhones compared to more than 20 million iPhones that it sold in the previous quarter.
Although the company posted 54% year over year increase in profits and 39% increase in revenues,
investors shrugged off this positive, with the stock going down by more than 5%.
Apple announced its earnings for Q1 2012. Apple disclosed record profits of $13 billion, much of it
credited to sales of the iPhone 4S launched in October.