2 Company OverviewApple Computer Inc. is designer and manufacture of personal computers, software, peripherals, networking solutions, and music playersProducts include:MacBook, MacBook Pro, Power Mac G5, iMac, Mac mini, iPod, Xserve G5OS X 10.4 Tiger, iTunes, iLife, Final Cut ProOver 130 Apple Retail Stores in 31 states
3 Mission StatementLeads the industry in innovation with its award-winning desktop and notebook computers, OS X operating system, and iLife and professional applications.Apple is also spearheading the digital music revolution with its iPod portable music players and iTunes online music store.
4 Apple SWOT Analysis Strengths 54% of Apple Profits are in foreign marketsKnowledge of customer baseHigh Quality ProductsBrand NameInnovationProduct DiversificationEasy use productAttractive, Small, lightEasy to carryApple is the oldest hardware manufacturerControl over the product by manufacturing both computer and their OS
5 Apple SWOT Analysis Weaknesses Quality Product control High Price iPod Nano may have a faulty screenFaulty ipod batteriesHigh PricePoor leadershipInternal engineering focus rather than a market focusThe Scare of LBO “Leveraged Buyout”No Dividends
6 Apple SWOT Analysis Threats Opportunity Enlarge target market with new product “Nike”Integration with other products “ Cars”The use of Intel chipsThe Intel chip allows the new machines to run the Windows Operation SystemDeveloping iTunes and music player technology into a mobile phone format.ThreatsHigh level of competition in the technology marketHigh product substitution effects
7 Financial Ratio Analysis Profit margin 9.97% (2006)ROA 11.40%ROE 22.90%Gross Profit 4.04 BCurrent Ratio 2.533Dept/Equity 0EPS 1.98Dividend payout 0P/E 32.45
8 Solutions/Future Outlook Apple can expect a prosperous futureSteady increase in sales net earnings over the past 5 yearsAlmost 200% sales increase from-Over 80% market share in iPodsMust continue to develop and acquire new strengthsI.e. Innovation, high quality products, good marketing planThreat of substitution/competition is decreased
9 Solutions/Future Outlook Must minimize number of faulty components of its productsIncrease R&D effortsMaintain customer loyaltyDecrease pricesiPod ranges from $300 to $400Mac desktop starts at $1300Result in gaining new customersPay dividendsStopped paying in 1995 due to 2 for 1 Stock SplitsCompetitors haven’t been payingImprove stockholder loyalty