10-KPeriod: FY2011

Apple Inc. Annual Report, Year Ended Sep 24, 2011

Filed October 26, 2011For Securities:AAPL

Summary

Apple Inc.'s 2011 Form 10-K highlights a period of exceptional growth and market leadership, driven by the continued success of its iconic iPhone and the burgeoning iPad. The company demonstrated remarkable revenue expansion, a testament to its innovative product pipeline and effective global distribution strategy. Apple's commitment to integrating hardware, software, and services provides a distinct competitive advantage, allowing it to capture significant market share across its product categories. Financially, Apple showcased robust profitability and a rapidly growing cash reserve, underscoring its strong operational performance and financial health. The company's strategic focus on research and development, coupled with its expanding retail footprint, positions it for sustained growth, although it also faces intense competition and various supply chain and market risks. Investors are presented with a picture of a company at the forefront of technological innovation, with strong execution and a compelling product ecosystem.

Financial Highlights

52 data points
Beta

Revenue

$108.25B

40.5% Gross Margin

Net Income

$25.92B

23.9% Net Margin

EPS (Diluted)

$0.99

Total Assets

$116.37B

Cash & Equivalents

$9.81B

Free Cash Flow

$37.53B

Financial Statements
Beta
Revenue$108.25B
Cost of Revenue$64.43B
Gross Profit$43.82B
R&D Expenses$2.43B
SG&A Expenses$7.60B
Operating Expenses$10.03B
Operating Income$33.79B
Interest Expense$0
Net Income$25.92B
EPS (Basic)$1.00
EPS (Diluted)$0.99
Shares Outstanding (Basic)25.88B
Shares Outstanding (Diluted)26.23B

Key Highlights

  • 1Exceptional revenue growth of 66% year-over-year to $108.2 billion in fiscal year 2011, driven by strong sales of iPhone and iPad.
  • 2iPhone sales nearly doubled, accounting for 43% of total net sales, with 72.3 million units sold.
  • 3iPad, launched in Q3 2010, generated $20.4 billion in revenue with 32.4 million units sold in its first full fiscal year.
  • 4Mac sales increased by 25% to $21.8 billion, with strong demand for MacBook Air and MacBook Pro.
  • 5Significant growth in cash, cash equivalents, and marketable securities, reaching $81.6 billion.
  • 6Continued investment in Research and Development, increasing by 36% to $2.4 billion, underscoring commitment to innovation.
  • 7Expansion of global distribution, with a growing number of retail stores and increased carrier partnerships worldwide.

Frequently Asked Questions

Apple's primary growth drivers in fiscal year 2011 were the iPhone and the iPad. iPhone sales saw an 87% increase, driven by strong demand for the iPhone 4 and expanded distribution. The iPad, in its first full fiscal year, generated $20.4 billion in sales, showcasing massive demand and contribution to revenue.

Apple held approximately $81.6 billion in cash, cash equivalents, and marketable securities as of September 24, 2011. The company indicated it anticipates retaining earnings for business operations and had no long-term debt. A significant portion of these funds was held by foreign subsidiaries.

Key risks highlighted include intense competition in the mobile and personal computer markets, reliance on a limited number of suppliers for components, the need for continuous innovation and successful product introductions, inventory management risks, potential quality issues, and risks associated with international operations and currency fluctuations. Apple also faces ongoing legal proceedings related to antitrust matters.

Apple's strategy includes continued expansion of its retail store network, with 40 new stores opened in 2011. These stores are designed to provide a high-quality customer experience, showcase products, and offer sales and post-sales support. The company also invests in programs to enhance third-party reseller sales.