Apple Business Strategy

A. Current Performance: Apple announced financial results for its fiscal 2009 fourth quarter ended September 26, 2009. The Company posted revenue of $9. 87 billion and a net quarterly profit of $1. 67 billion. These results compare to revenue of $7. 9 billion and net quarterly profit of $1. 14 billion, in the year-ago quarter. Gross margin was 36. 6 percent, up from 34. 7 percent in the year-ago quarter. International sales accounted for 46 percent of the quarter’s revenue. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $12.

25 billion of “Adjusted Sales” and $2. 85 billion of “Adjusted Net Income. ” Apple sold 3. 05 million Macintosh® computers during the quarter, representing a 17 percent unit increase over the year-ago quarter. The Company sold 10. 2 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter. Apple sold 7. 4 million iPhones in the quarter, representing seven percent unit growth over the year-ago quarter. B. Strategic Posture Focus on making the best product, and rewards will follow. In fact, Apple’s new partners are signing up in spite of, rather than because of, Jobs’ rules of engagement.

Apple makes little pretense of building a level playing field, but routinely picks favorites—such as Google for building mapping and video applications for the iPhone. And rather than aim for the most partners, Apple focuses on attracting the best ones. As a result, the Mac and iPod feel more like a gated, elitist community, with Apple keeping close watch over who gets in. “The notion of a platform is a very PC-oriented way of looking at the world,” says Silicon Valley financier Roger McNamee. “Consumers just want a great experience.