Apple and the iPad®

New Mexico Highlands University

Mission

Apple is committed to bringing the best personal computing experience to students,

creative professionals and consumers around the world through its innovative

hardware, software and Internet offerings.

HistoryiPad Model Release Date (United States)

iPad® April 3, 2010

iPad 2® March 11, 2011

iPad 3® March 16, 2012

iPad 4® November 2, 2012

iPad mini® November 2, 2012

iPad Air® November 1, 2013

iPad mini® (with Retina display) November 12, 2013

Market Analysis

IBIS Industry Report

United StatesMacro-environment

Gross Domestic Product 15.68 trillion Growth Rate 2.8 Inflation Rate 1.51 Unemployment Rate 7.3%

Apple Inc. 13.0%

Amazon 35.3% Other 45.2%

Dell Inc. 6.5%

Product

16 GB 499$ 16 GB 399$ 16 GB 399$ 16 GB 299$ 32 GB 599 32 GB 499 64 GB 699 64 GB 599 128 GB 799 128 GB 699

16 GB 629$ 16 GB 529$ 16 GB 529$ 16 GB 429$ 32 GB 729 32 GB 629 64 GB 829 64 GB 729 128 GB 929 128 GB 829

Wi-Fi + Cellular Wi-Fi + 3G Wi-Fi + Cellular Wi-Fi + Cellular

iPad Air iPad 2iPad mini (Retina) iPad mini

Wi-Fi Wi-Fi Wi-Fi Wi-Fi

PRICES

Product

iPad Air iPad 2iPad mini (Retina) iPad mini

Weight 1 pound 1.33 pounds 0.73 pound 0.68 poundDisplay Retina display Retina display

9.7' LED 9.7' LED 7.9" LED 7.9" LEDChip A7 A5 A7 A5Cameras FaceTime HD FaceTime FaceTime HD FaceTime HD

iSight Camera Back Camera iSight Camera iSight CameraVideos 1080p HD 720p HD 1080p HD 1080p HD

SPECIFICATIONS

Marketing Apple relies on brand loyalty

Media publicity is a form of advertising

Celebrity appeal and product placement in movies and television shows

Research & Development

Apple’s innovation is embodied in its Intellectual Property, including Patents, Trademarks, and Copyrights

Protects intellectual property aggressively

Apple’s current R&D is secretive Rumors of an iPad 6 in development 2013 R&D budget was $4,475,000

INTELLECTUAL

PROPERTY

CURRENT

R&D

Stakeholders

CUSTOMERS

Governments Schools Families Businesses

MANAGEMENT INVESTORS

EMPLOYEES

SUPPLIERS

Environmental &Social Impact

all values in million metric tons

30.9 18.849 1.545 9.27 0.618 0.618

GREENHOUSE GAS EMISSIONS

61% 5% 30% 2% 2%

Regulatory Compliance

Required to file reports with the Securities and Exchange Commission (SEC)

Bound by Sarbanes-Oxley Act of 2002 (SOX) standards

Compliant with trade agreements and embargoes

Corporate Structure

Tim Cook

Peter OppenheimerChief Financial Officer

Jeff WilliamsOperations

Eddy CueSoftware Service

Dan RiccioHardware Engineering

Graig FederighiSoftware Engineering

Philip SchillerWorldwide Marketing

Jonathan IveDesign

Bruce SewellGeneral Counsel

Board of Directors Bill Campbell

Andrea Jung

Millard Drexler

Ronald D. Sugar

Tim Cook

Arthur D. Levinson

Albert Gore Jr.

Robert A. Iger

Financial Statements2013 2012 2011

Net sales 170,910 156,508 108,249 Net income 37,037 41,733 25,922 Earnings per share:

Basic 40.03 44.64 28.05 Diluted 39.75 44.15 27.68

Cash dividends declared per share 11.40 2.65 - Shares used in computing earnings per share:

Basic 925,331 934,818 924,258 Diluted 931,662 945,355 936,645

Total cash, cash equivalents and marketable securities

146,761 121,251 81,570

Total assets 207,000 176,064 116,371 Long-term debt 16,960 - - Long-term obligations (3) 20,208 16,664 10,100 Total liabilities 83,451 57,854 39,756 Total shareholders' equity 123,549 118,210 76,615

(in millions, except number of shares, which are reflected in thousands, and per share data amounts)

Financial PerformanceApple (2013) Industry

Current Ratio 1.68 1.20 Acid-test Ratio 1.23 0.67 Gross Profit Margin 37.62%Operating Profit Margin 28.67%Return on Assets (ROA) 19.34% 6.39%Return on Average Equity (ROE) 30.64% 13.55%Debt-Equity Ratio 67.54% 112.00%Interest Coverage Ratio 369.79 Operating Cash Flow/Sales Ratio 31.40%Earnings per share (EPS) 40.03$ 10.07$ Price / Earnings Ratio 39.75$ (P/E Ratio) 14.15 24.33

SWOT AnalysisStrengths Brand loyalty Innovative

technology Low manufacturing costs Environmental policies Strong financial position

Weaknesses Market share Marketing strategy Technology compatibility

Opportunities Increase market share Innovation leader

Threats Market competition

S W

O T

Objectives & Strategies

Focus on developing new models

Investments into research and development

Modifications to market strategy

Ethical leadership

2/24/55 – 10/5/11