Apple Inc's Comment on Competitors and Industry Peers
The markets for the Company’s products and services are highly competitive
and the Company is confronted by aggressive competition in all areas of its
business. These markets are characterized by frequent product introductions
and rapid technological advances that have substantially increased the capabilities
and use of mobile communication and media devices, personal computers, and other
digital electronic devices. The Company’s competitors who sell mobile
devices and personal computers based on other operating systems have aggressively
cut prices and lowered their product margins to gain or maintain market share.
The Company’s financial condition and operating results can be adversely
affected by these and other industry-wide downward pressures on gross margins.
Principal competitive factors important to the Company include price, product
features, relative price/performance, product quality and reliability, design
innovation, a strong third-party software and peripherals ecosystem, marketing
and distribution capability, service and support, and corporate reputation.
The Company is focused on expanding its market opportunities related to personal
computers and mobile communication and media devices. These markets are highly
competitive and include many large, well-funded and experienced participants.
The Company expects competition in these markets to intensify significantly
as competitors attempt to imitate some of the features of the Company’s
products and applications within their own products or, alternatively, collaborate
with each other to offer solutions that are more competitive than those they
currently offer. These markets are characterized by aggressive pricing practices,
frequent product introductions, evolving design approaches and technologies,
rapid adoption of technological and product advancements by competitors, and
price sensitivity on the part of consumers and businesses.
The Company’s digital content services have faced significant competition
from other companies promoting their own digital music and content products
and services, including those offering free peer-to-peer music and video services.
The Company’s future financial condition and operating results depend
on the Company’s ability to continue to develop and offer new innovative
products and services in each of the markets in which it competes. The Company
believes it offers superior innovation and integration of the entire solution
including the hardware (iPhone, iPad, Mac, and iPod), software (iOS, OS X and
iTunes), online services, and distribution of digital content and applications
(iTunes Store, App Store, iBooks Store and Mac App Store). Some of the Company’s
current and potential competitors have substantial resources and may be able
to provide such products and services at little or no profit or even at a loss
to compete with the Company’s offerings.
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