1. Apple Computer Inc.
Case Analysis

2. Company Overview
Apple Computer Inc. is designer and manufacture of personal computers, software, peripherals, networking solutions, and music players
Products include:
MacBook, MacBook Pro, Power Mac G5, iMac, Mac mini, iPod, Xserve G5
OS X 10.4 Tiger, iTunes, iLife, Final Cut Pro
Over 130 Apple Retail Stores in 31 states

3. Mission Statement
Leads 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 markets
Knowledge of customer base
High Quality Products
Brand Name
Innovation
Product Diversification
Easy use product
Attractive, Small, light
Easy to carry
Apple is the oldest hardware manufacturer
Control 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 screen
Faulty ipod batteries
High Price
Poor leadership
Internal engineering focus rather than a market focus
The 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 chips
The Intel chip allows the new machines to run the Windows Operation System
Developing iTunes and music player technology into a mobile phone format.
Threats
High level of competition in the technology market
High product substitution effects

7. Financial Ratio Analysis
Profit margin 9.97% (2006)
ROA 11.40%
ROE 22.90%
Gross Profit 4.04 B
Current Ratio 2.533
Dept/Equity 0
EPS 1.98
Dividend payout 0
P/E 32.45

8. Solutions/Future Outlook
Apple can expect a prosperous future
Steady increase in sales net earnings over the past 5 years
Almost 200% sales increase from
-Over 80% market share in iPods
Must continue to develop and acquire new strengths
I.e. Innovation, high quality products, good marketing plan
Threat of substitution/competition is decreased

9. Solutions/Future Outlook
Must minimize number of faulty components of its products
Increase R&D efforts
Maintain customer loyalty
Decrease prices
iPod ranges from $300 to $400
Mac desktop starts at $1300
Result in gaining new customers
Pay dividends
Stopped paying in 1995 due to 2 for 1 Stock Splits
Competitors haven’t been paying
Improve stockholder loyalty