Financial analysis concepts and methods

Financial Analysis

Apple, Incorporated is traded under the symbol AAPL in the NASDAQ stock exchange. Currently Steve Jobs serves as the Chief Executive Officer and co-founder. Other important management personal can be found in Appendix a. Apple Inc. is a computer hardware and software and consumer electronics manufacturer. Recently, Apple Inc.'s main focus is on the MP3 music field with its main anchor products being the iPod, iTunes and the newly released iPhone phenomena.

A full list of their main products and services can be found in Appendix B.

According to Apple's mission statement, "Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings." Since its founding, Apple has rapidly expanded beyond personal computing and has become a leader in the production of cutting-edge personal electronics and entertainment. Thus, although its mission statement of bringing the best has remained the same, its vision and goals have expanded to include bringing the best in electronic convenience and entertainment to people. Because Apple, Inc. has a goal of innovative invention, its line of product and services offerings has been able to rapidly expand and evolve to not only stay up with the changing market, but to stay one step ahead of the market and therefore be able to control the market with the introduction of such new technologies as iPod, iPhone and Apple Television.

Apple is a very financially successful company. For a full SWOT analysis, see Appendix C. For more in-depth financial statistics, see Appendix D.

Apple's main financial strengths are its new products in which it has maintained a relatively stronghold on. The best example of this is the iTunes and iPod product lines. Apple, Inc. designed these two compatible technologies in a manner that has created a near-monopoly on the industry. In other words, in order to use your iPod, you must have iTunes. On the other hand, to listen to the iTunes music, you must have an iPod. This strategy has worked primarily because Apple has offered the highest quality, largest and most reasonably priced music download systems.

Even just five years ago, if one were to ask you whether or not they should invest in Apple, Inc., the answer would be quite simply, "no." At that time, Apple, Inc.'s financial status was weak and decreasing. However, since that time things have changed and no Apple, Inc. boasts one of the strongest financial situations in the it industry. Thanks to its continued innovative attitude and diligent research, Apple, Inc. has been able to continue to grow its products, services and profits. With the recent launch of the highly anticipated iPhone, this trend does not show any signs of stopping. Thus, today, if someone asked you whether they should invest in Apple, Inc., the answer would be "yes."

Appendix a Steve Jobs: CEO and Co-Founder

Steve Wozniak: Co-founder

Timothy D. Cook: COO

Peter Oppenheimer, CFO

Philip W. Schiller: SVP of Marketing

Jonathan Ive: SVP of Industrial Design

Tony Fadell: SVP of iPod

Ron Johnson: SVP of Retail

Sina Tamaddon: SVP of Applications

Bertrand Serlet: SVP of Software Engineering

Scott Forstall: Vice President of Platform Experience.

Appendix B

Mac Personal Computer System

Mac OSX and OSX server

Ipod and iTunes

IPod Hi-Fi

Quick Time

ILife, iWork

Safari

Apple Remote Desktop

Xsan

Final Cut Studio

Logic Pro

Apple TV

Aperture

Final Cut Studio

Cinema Display

Appendix C

Strengths:

Apple has seen new success as a result of its iPod music player, which has increased profits by $320 in the second quarter of June, 2005. The positive reviews of iPod has given the company new marketing opportunities for its other products, thus seeing an increased positive brand perception of its Macintosh computer line. As a result, Apple has established itself as one of the most well-established and healthy technology-based brands in the world and has a very healthy and loyal customer following. As a result, Apple is successful in not only recruiting new customers but, more importantly, retaining prior customers and being able to extend new products to them.

Weaknesses:

Apple has had problems with the functioning of their products. For example, the highly anticipated Apple iPod Nano was released with a faulty screen and thus required a large-scale recall. Also, because much of Apple's recent success stems from its iTunes program, Apple is under pressure from the music industry to increase the prices on music downloads which, if it does, could give Apple a negative reputation in terms of its customers.