Apple Inc economic Report

8/3/2019 Apple Inc economic Report

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APPLE INC

By Hassan Abdulrahman Al Hussaini



Table of Content

• Introduction --------------------------------------------------------------------- 3

• Revenue --------------------------------------------------------------------------- 4

• Income Statements -------------------------------------------------------------- 7

• The App Store ------------------------------------------------------------------- 8

• Supply & Demand ------------------------------------------------------------- 10

• Competitors --------------------------------------------------------------------- 12

• Conclusion ---------------------------------------------------------------------- 15

• Reference ------------------------------------------------------------------------16

Introduction

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Apple had a vision, which is to make a computer that was supplied to the consumer

not only the business. The computers before Steve jobs and Steve Wozniak had no

monitor and no mouse. Apple has produced computers that had a visual interface that

was so easy no one could believe it. At that time creating files and dragging them to

the trash was a visionary approach. On the other hand, a rival Company shared a

similar visual operating system to businesses with other companies. So apple was just

an expensive computer that most people won’t buy. There are similar products that

are cheaper and have better hardware at the same time. Steve Jobs was fired and

attended typography lessons. After that he came back to his company and changed the

company to produce beautiful products that are easy for the consumers. Then apple

created a portable music player that has the capacity for more than 80,000 songs. Also

it created the iPhone the first cellphone that had appealed developers to create apps

and gain profit from the cellphone. Apple has become one of the most influential and

fastest growing companies in the world. It has changed the electronics industry we

will see the supply and demand of the products. The effects of how this company

changed the industry.

Revenue

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Apple Company has made one of the biggest grow in US economy. Apple

Company during the early beginning and garage producing products from 1977 until

1981 has make a revenue of 100 million dollars and the number of employees has

grown from two to 1000 employees just in four years. For that time it was something

unthinkable. However in years after 1985 Apple has faced lot of competitors and

difficult times. Their shareholders and invertors Steven Jobs and Stephan Wozniak

have sold their shares and have been retired. But still Apple managed to grow until

1987 when they made the historic big revenue of 10 billion dollars. After those great

times for Apple the profit and the marked share started to decrease. In next ten years

Apple has changed several managers but with out success to stabilize and increase

their share in Computer market. With comeback of Steve Jobs in 1998 the company

has started to earn money again. Innovation and vision of this man has made Apple to

the most satisfy and luxurious brand in digital communication, music, and computer

world. In our project we will focus on data from 2008 to 2010. We will compare those

data to see how the company has made the progress after the big recession in 2007.

Comparing the data from 2008 first quarter with other quarters we can see that

Revenue has rapidly decreased from $9,608 million dollar in 1 quarter 2008 to $7,895

million dollar in fourth quarter. The other two quarters it was not drastic changings

comparing with fourth quarter. As we can see in the table the revenue for second and

third quarter was $7,512 and$7,464. So we can clearly state that revenue has

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significant decreased from quarter one, but the Computer units sold comparing first

and forth quarter is slightly increasing from 2319 to 2611 in fourth quarter. So we can

state that even does the revenue has decreased, the total sale of Apple units has

increased in year 2008. The total revenue in 2008 for Apple Company was $32479

million.

Now we will use data to compare Apple Company revenue and CPU units

sold for the year 2009. First quarter revenue was $10,167 million and total sold units

was 2,524 units. We can see as in 2008 second quarter total revenue decreased around

2000 million dollars comparing with a first quarter while units sold decreased 308

thousands. Total revenue for second quarter was $8,163 million and total sale 2,216

thousand. The third quarter has not differed from second quarter in revenue, while

units sold was increased by 387 thousand. The revenue was 8337 million while units

sold was 2603 thousand in third quarter of 2009. The last quarter of 2009 revenue has

increased comparing with second and third quarter, but it was still less than in first

quarter of the year, while sold units were improved comparing with whole year. The

revenue for fourth quarter was $9,870 million and sold units was 3,053 thousands.

The total revenue for 2009 was 36537 millions while CPU unit sold was 10396

thousands.

In Addition, the last year that we will focus on is 2010. As we will see it was

the most successful year for Apple Company after the recession in 2007. In the first

quarter revenue was $15,683 million and CPU units sold 3362 thousands. In the

second quarter the revenue drop to $13499 million and unit sold also decreased to

2,943. The third quarter revenue increased to $15700 million and CPU unit sold to

3,472. Last quarter that we have compared has shown that Apple has one more time

increased the revenue, first time over $20000 million and CPU units sold 3885

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thousands. The 2010-year was all high year for Apple Inc. Total revenue for 2010 was

$64,882 million and CPU unit sold 13,662.

To conclude, we can clearly state that under management of Steven Jobs and

his vision Apple Company has made a great progress in innovating the product line

and in the same time increased the revenue and units sold making the Apple one of

the most successful company in the world.

Income Statement

According to apple their income mostly comes from the iPhone that is why oddly they

only put in their income statement the how much income they gained from their most

selling product. Now first we must specify what is the iPhone and what makes it

become Apples most selling product.

Apple has gained great income based because their products are high in demand.

Apple has provided their income statement from 2007 till 2009.

From the data the sales of the iPhone in 2007 is 1,389 it was a success but did not get

much customers since at that take it was barely announced and the price was too high

for the customers its cost was around $599 for the 8GB model. In 2008 after released

the newer model of the iPhone “iPhone 3G” with a price decline from $599 to $499

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for the 8GB model has sold intensely around 11,627 units sold. In 2009 the “iPhone

3GS” was announced with an amazing price of $399 for the 8GB model it has sold

over 20,731 iPhones.

The App Store

The App Store is a store available in all its handheld devices from apple. The store is

attracting a lot of developers to sell their applications in that store. In fact what makes

the iPhone successful is not the hardware nor the operating system no its one simple

thing it’s the app store. The App Store made a new kind of market that shifted the

strategies that made lots of company’s even magazines to provide their magazines in

the App Store. So lots of companies supplied their apps in the App Store and

surprisingly they gained more profit than any other product they sold in the market. In

fact there are people whom profit only comes from the app store. The App Stores

apps are between the ranges of price of $1 to $100. The Main attraction of the App

Store is the cheap apps that are between the ranges of $1 to $5.

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From the 15 billion paid apps sold the Average price sold is $1.44. So if we take an

app that’s its price is $1.44 we can know the total cost of the app. The developer takes

$1.09. While apple gets $0.21 to allow the product to be provide the app in its store.

The processing of the app gets $0.02. If you paid via Credit card then your bank takes

$0.23 of the app. The average of paid apps in 2011 is 83 from 52 paid downloads in

2010 that is an increase in demand.

Rovio one of the best companies

that produce mobile games called

Angry Birds. That game has been

entertaining users a lot that the game got its 500 million download. Which by far

makes is the most downloaded game in history. The company gains $80 million/ year.

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Supply and Demand

The MacBook is the most demanded computer they supply. There are three types of

MacBooks’ there is the MacBook air, the MacBook and the MacBook pro. The

MacBook like no other had 3 types so that means they had to produce and

manufactory and have enough labor and machinery to make these products Unlike

any laptop the MacBook is made from a single slab on Aluminum that slab would

make a single MacBook. It has a unique build, with a single Aluminum Uni-body that

makes the body strong and recyclable.

From the 3 MacBooks the MacBook air is

the thinnest Netbook ever. Not only that

but it also is the most powerful netbook

its so thin that it doesn’t have a disk drive

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it also so thin that it developed a new type of hard drive its called a Flash Drive. The

MacBook Air is designed for mobility with high performance that made it one of the

most selling Netbooks.

The sales data the macbook sales is decreasing. Apple has decided to stop the

production of one of its products to provide more macbook airs and Pros. According

to munster "We see this as a sign that demand is outpacing the company's build

expectations, and it may take several weeks to reach a supply demand equilibrium.”

So even though apple is a great company manufacturing a product would mean that

another product is not done because there is a limited number of a labor. So apple has

discontinued macbooks and is now only supplying macbook airs’ and macbook pros’

Equilibrium price is when the price is 300 thousand.

Competitors

Comparison between Apple ,Nokia , and Motorola

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Year 2009 2009 2009

Compa

ny

Description

Apple Nokia Motorola

Revenues $36.54

billion

$58.8 billion $22.04

billion Total liabilities $26.02

billion

$32.5 billion $15.83

billionNet income $5.7 billion $1.28 billion -$28 million

Analysis:

Revenues of the three companies (from 2009-2011).

During 2009, the total revenues of Nokia were the highest

compared to both Apple and Motorola, and the company that has

the lowest revenues was Motorola. However, in 2010 the total

revenues of Apple increased gradually from $36.54 billion to $65.23

billion compared to the other companies, but at the same time

Motorola still has the lowest revenues in that year. Finally, for

year2011 Apple has the highest revenues which were increased

very sharply with a value of $108.25 billion compared to Motorola

and Nokia.

Year 2010 2010 2010

Comp

anyDescription


1



Revenues $65.23

billion

$56.94

billion

$4.89 billion

Total liabilities $27.39billion

$30.71billion

$15.48 billion

Net income $14.01billion

$2.48billion

$106 million

Total liabilities of the three companies (from 2009-2011).

Through the year 2009, the total liabilities of Nokia Company were

the highest compared to our selected company (Apple) and

Motorola. This means that Nokia was depending too much on the

borrowing because the cash that was available to Nokia wasn’t that

much sufficient, so they depended on the borrowing to finance their

operations, and this is considered as a bad sign to Nokia in that

year. However, when we come to talk about Motorola, we can see

that they have the lowest liabilities in that year; which means that

they had an enough money .During 2010, the T.L of Nokia

decreased compared to 2009 which was the highest, but Apple’s T.L

increased from 2009, but Motorola still had the lowest T.L.Finally,

during 2011 the T.L of Apple increased also and became the highest

compared to the other companies.

2



Net income of the three companies (from 2009-2011).

During 2009, the net income of Apple was the highest with a value

of $5.7 billion compared to Nokia and Motorola, and Motorola had

the lowest net income with a value of (- $28) million; which means

that they had a net loss in that year. During 2010, the net income of

Apple increased very harshly with a value of $14.01billioncompared

to 2009; which means a good sign. Also, Motorola still having the

lowest net income and didn’t improve. Finally, in year 2011 the net

income of Apple reached to the peak with a value of $25.92 billion,

and at the same time both companies Nokia and Motorola had net

loss.

In general , we can say that Apple Company is better than Nokia

and Motorola in terms of the revenues and the net income because

the company’s revenues and net income is increasing from year to

2

Year 2011 2011 2011

CompanyDescription


Revenues $108.25 billion $12.05billion

$3.3 billion

Total liabilities $39.76 billion $29.4billion

$4,529,000million

Net income $25.92 billion -$88.64million

-$32 million



year. Therefore, this means that this company is trying to work

more effectively and improve its own image, and that’s why it is

becoming well known company. In the case of Motorola, we can say

that this company isn’t working well because when we made the

comparison, we saw that this company has the lowest revenues and

net income, and in many other things. Therefore, this means that

Motorola needs to improve its position by hiring effective manages

and skilled employees, to do research and development (R&D) and

to hire employees from different regions who have different

experiences……, etc.

Conclusion

In conclusion, Apple is one of the fastest growing companies in the world.

They focus in innovating their products in order to satisfy the needs of the customers.

Steve Jobs vision is to differ apple products from the competitors. As we can see in

Apples Official statement:

“Apple designs Macs, the best personal computers in the world, along with OS X,

iLife, iWork, and professional software. Apple leads the digital music revolution with

its iPods and iTunes online store. Apple is reinventing the mobile phone with its

revolutionary iPhone and App Store, and has recently introduced its magical iPad

which is defining the future of mobile media and computing devices.” – Apple Inc.

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Apple has based lots of its decision-making on the economy. It removed the

MacBook because two main factors which is that there is a shortage of supply and

that it would be better for them since they have limited labor is to focus on producing

its other products. The iPhone is the most demanded cellphone in the market because

it is supported by an abundance of developers that provide these apps. Apple also has

crushed its competitors because it patented every product it owns so that there are no

copycats and that it would have the right to sue them also it decreased its price to

make it cheaper than the price of the competitors.

Reference

• Rameet Chawla. ( Nov 26, 2010). Quota. In How much money

has Angry Birds (the iOS game) grossed?. Retrieved Nov 20,

2011, from http://www.quora.com/How-much-money-has-

Angry-Birds-the-iOS-game-grossed

• Dutch trading. (Aug 30, 2011). Seeking Alpha. In The App

Economy Will Be The Growth Driver For Apple. Retrieved Nov

20, 2011, from http://seekingalpha.com/article/290634-the-

app-economy-will-be-the-growth-driver-for-apple

• . (Sep 24, 2011). Reuters. In Apple Inc (AAPL.O). Retrieved

Nov 20, 2011, from

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http://www.quora.com/How-much-money-has-Angry-Birds-the-iOS-game-grossed


http://seekingalpha.com/article/290634-the-app-economy-will-be-the-growth-driver-for-apple








http://www.reuters.com/finance/stocks/incomeStatement?

perType=ANN&symbol=AAPL.O

• Sindre Lia. (Apr 21, 2011). InfoSync. In Apple Sales and

Revenue Charts 2007-2011. Retrieved Nov 20, 2011, from

http://www.infosyncworld.com/reviews/cell-phones/apple-

sales-and-revenue-charts-2007-2011/11957.html

2

http://www.reuters.com/finance/stocks/incomeStatement?perType=ANN&symbol=AAPL.O


http://www.infosyncworld.com/reviews/cell-phones/apple-sales-and-revenue-charts-2007-2011/11957.html






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