01—Abstract
Summary
Summary of the 10-K filed November 5, 2008. Cited figures are marked; the original filing is the authoritative source.
Apple Inc.'s 2008 Form 10-K highlights a period of robust growth and innovation, driven by strong performance across its core product lines, including Macs, iPods, and the newly launched iPhone.
The company demonstrated significant year-over-year increases in net sales, indicating growing market penetration and consumer demand for its integrated hardware, software, and services ecosystem. Financially, Apple maintained a healthy cash position and continued to invest heavily in research and development to fuel future product pipelines.
Despite facing intense competition and potential supply chain risks, the company's strategic focus on innovation, user experience, and expanding its retail and online distribution channels positions it for continued success. Investors should note the company's commitment to reinvesting earnings for growth rather than paying dividends, reflecting a strategy centered on expanding its market leadership and technological advancements.
02—Key points
Key Highlights
- Net sales increased by 35% year-over-year, reaching $32.5 billion, demonstrating strong market demand.
- Mac net sales grew by 38% year-over-year, driven by strong performance in portable products and the iMac.
- iPod net sales saw a 10% increase, with iPod touch driving higher average selling prices.
- The iPhone, launched in the previous year, generated $1.8 billion in net sales in its first full fiscal year of availability, with 11.6 million units sold.
- Research and development expenses increased significantly by 42% to $1.1 billion, reflecting a commitment to innovation.
- The company's cash, cash equivalents, and short-term investments grew to $24.5 billion, providing substantial financial flexibility.
- Apple continued to expand its retail footprint, opening 50 new stores, bringing the total to 247, contributing to a 53% increase in Retail net sales.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2008, Apple Inc. kept $0.16.
- Revenue$37.49B100.0%
- Cost of revenue−$24.29B64.8%
- Gross profit$13.20B35.2%
- Operating costs−$4.87B13.0%
- Operating income$8.33B22.2%
- Interest, other & tax−$2.21B5.9%
- Net income$6.12B16.3%
Where FY2008 revenue went
$37.49B- Cost of revenue: $24.29B, 65% of revenue
- Net income: $6.12B, 16% of revenue
- R&D: $1.11B, 3.0% of revenue
- SG&A: $3.76B, 10% of revenue
- Interest, other & tax: $2.21B, 5.9% of revenue
Kept 16% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2008filed November 5, 2008Financial Statements
FY2008 against FY2007
| Line item | FY2008FY2007 | Change |
|---|---|---|
| Revenue | $37.49B$24.58B | +52.5% |
| Cost of Revenue | $24.29B$16.43B | +47.9% |
| Gross Profit | $13.20B$8.15B | +61.9% |
| R&D Expenses | $1.11B$782.00M | +41.8% |
| SG&A Expenses | $3.76B$2.96B | +26.9% |
| Operating Expenses | $4.87B$3.75B | +30.0% |
| Operating Income | $8.33B$4.41B | +88.9% |
| Net Income | $6.12B$3.50B | +75.1% |
| EPS (Basic) | $0.25$0.14 | +71.8% |
| EPS (Diluted) | $0.24$0.14 | +72.5% |
| Shares Outstanding (Basic) | 24.68B24.21B | +2.0% |
| Shares Outstanding (Diluted) | 25.26B24.90B | +1.4% |
05—Questions
Frequently Asked Questions
What were Apple's primary growth drivers in fiscal year 2008?
Apple's growth in fiscal year 2008 was primarily driven by strong sales across its product portfolio, including significant increases in Mac net sales (up 38%), particularly portable Mac systems, and a 10% rise in iPod net sales, fueled by the popular iPod touch. The newly introduced iPhone also contributed substantially, generating $1.8 billion in net sales.
How is Apple addressing competition and market risks?
Apple acknowledges intense competition and market risks, including rapid technological change and component supply constraints. Its strategy to counter these includes continuous investment in R&D to maintain product innovation, leveraging its integrated ecosystem of hardware, software, and services, and expanding its direct sales channels through online and retail stores. The company also manages supply chain risks by entering into long-term supply agreements for key components.
What is Apple's financial health and outlook regarding shareholder returns?
Apple exhibited strong financial health, with net sales growing 35% to $32.5 billion and a significant increase in cash, cash equivalents, and short-term investments to $24.5 billion. The company did not declare or pay cash dividends and anticipates retaining earnings for business operations, indicating a focus on reinvesting in growth and innovation rather than immediate shareholder distributions.
06—Continue