Analysis of Apple Inc. Company

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Introduction

Apple Inc. is among the largest tech companies in the world, with products ranging from software to hardware. The company’s history and background are well-known due to the high popularity of its founder. Apple Inc. was selected due to personal interest and curiosity. The given analysis and assessment will primarily focus on Apple’s company description, background, industry, as well as its recent key financial metrics evaluation, such as mean, range, and standard deviation.

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Company Description

It is important to note that Apple Inc. is a tech company, which primarily specializes in the development and manufacturing of hardware devices but also utilizes its own software platforms exclusive to the brand. In sum, “Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables, and accessories, and sells a variety of related services. The Company’s products include iPhone, Mac, iPad, and wearables, home and accessories” (Reuters, 2021, para. 1). In other words, the overall categories of product lines are diverse and expansive, where the emphasis is put on both performance and design with an accentuation on customer experience. In addition, Apple Inc.’s services involve “advertising, AppleCare, cloud services, digital content, and payment services” (Reuters, 2021, para. 1). The target customers are comprised of “the consumer, small and mid-sized business, education, enterprise, and government markets” (Reuters, 2021, para. 1). The company’s chief executive officer or CEO is Timothy D. Cook, and the executive leader and chairman of the board is Arthur D. Levinson. The headquarters is situated in Cupertino in the state of California, United States (Reuters, 2021). Apple Inc.’s CFO, COO, and vice president are Luca Maestri, Jeffrey. E. Williams, and Kathrine L. Adams, respectively.

Company Background

Apple Inc.’s background can be best reflected in its history since its foundation by two young individuals. The company was founded on 1 April 1976 by Steve Wozniak and Steve Jobs in a business partnership with Ronald Wayne (Rawlinson, 2017). The first computer was developed by Wozniak during the year 1975, prior to the foundation date, and the company name came from Jobs’ inspiration after he returned from an apple farm (Rawlinson, 2017). It should be noted that Apple Computer was incorporated in 1977, where Mike Markkula invested in the company the sum of $250000 (Rawlinson, 2017). One of the major successes for the company was the release of Macintosh in 1984. Later, one of the biggest hits of Apple Inc. was in 2007, when the company was no longer solely focused on computers, transitioned towards consumer electronics, and launched the first iPhone (Rawlinson, 2017). In 2007 and 2008, the company consecutively launched iTunes Store and App Store (Rawlinson, 2017). In 2020, the company reached the market value of $2 trillion, making it the most valued corporate entity in the history of the United States (Rawlinson, 2017). Therefore, Apple’s success story is reflected in its background and history, where it began as a small initiative of two young individuals whose proactive developments led to what it is today.

Industry

It is important to point out that Apple Inc. operates in the consumer electronics industry, including computer hardware and computer software. These examples include smartphones, personal computers or PCs, electronic watches, TVs, and other accessories. In the case of software, there are music platforms, mobile and computer application platforms, and inherent device software, such as IOS. The industry can be categorized as highly competitive with a high bar for entry since the raw materials, technical skills, and labor needed to manufacture a smartphone or another form of computer is costly. Therefore, the industry is mainly dominated by a number of giant enterprises, such as Samsung, Huawei, Xiaomi, LG, and others. One can see that Apple Inc.’s competition is primarily international. In regards to the software market, Apple also directly competes with Microsoft, Google, Amazon, and other platforms due to their overlapping services.

Rationale

The main reason for selecting Apple Inc. for the given assessment is due to my personal interest and curiosity since I regularly use the company’s products and services. In addition, it is among the well-recognized corporate entities in the world, and its history and brand are well-known. Therefore, I was highly interested in analyzing the financial metrics of the company in order to expand my knowledge and apply my learned skills of financial assessment to the company of my interest. The source of this success is seen in the fact that Apple’s iPhone has the highest consumer satisfaction ratings in history (Rawlinson, 2017). Apple’s profit exceeds IBM’s, and it is considered one of the most innovative and valuable companies in the world. Such overwhelming success always raises questions about its origin. In a short time, Apple has done a great job of marketing its products (Rawlinson, 2017). In addition, Apple stores are the most productive in retail history. Due to a wide range of products, constant innovative development, the creation of new designs, and methods of product promotion, the company creates an image of uniqueness and status for your products. Accordingly, when introducing unique products to the market, the company can successfully use the strategy of high prices, and with their further sale, the strategy of price anchor, which is analyzing its key financial metrics, is interesting and engaging.

Calculations

The key financial metrics of Apple Inc. for the past five years are shown in Table 1 below. The mean, range, and standard deviation or SD values for the company’s revenues, net income, and total assets are shown in Table 2.

Table 1. Financial Metrics

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Apple Financial Statements 2016-2020
2016 2017 2018 2019 2020
Sales $215 639,00 $229 234,00 $265 595,00 $260 174,00 $274 515,00
2016 2017 2018 2019 2020
Total Expenses $155 615,00 $167 890,00 $194 697,00 $196 244,00 $208 227,00
2016 2017 2018 2019 2020
Net Income $45 687,00 $48 351,00 $59 531,00 $55 226,00 $57 411,00
2016 2017 2018 2019 2020
Total Assets $321,686 $375,319 $365,725 $338,516 $323,888
2016 2017 2018 2019 2020
Total Liabilities $193,437 $241,272 $258,578 $248,028 $258,549
2016 2017 2018 2019 2020
Shareholders’ Equity $ 128,29 $ 134,05 $ 107,15 $ 90,49 $ 65,34
2016 2017 2018 2019 2020
Stock Price (12/31) $ 27,29 $ 40,52 $ 38,34 $ 72,44 $ 132,07

Table 2. Mean, Range, and Standard Deviation

Mean Range SD
Sales $249 031,40 58 876,00 25273,07695
Net Income $53 241,20 13 844,00 5955,422756
Total Assets $350,312 53,633 24,64077995

Conclusion

In conclusion, Apple Inc. is an outstanding example of a highly successful enterprise, which started out as a small garage business by two young individuals. The company specializes in consumer electronics, which includes both computer software and hardware. The range of competitors is expansive, such as Samsung, Microsoft, Xiaomi, and other large international corporations. Apple’s brand and quality of products are among the highest in terms of customer satisfaction, which due to the company management and operational excellence.

References

Rawlinson, N. (2017). History of Apple: The story of Steve Jobs and the company he founded. MacWorld.

Reuters. (2021). Apple Inc. 

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BusinessEssay. (2022) 'Analysis of Apple Inc. Company'. 14 September.

References

BusinessEssay. 2022. "Analysis of Apple Inc. Company." September 14, 2022. https://business-essay.com/analysis-of-apple-inc-company/.

1. BusinessEssay. "Analysis of Apple Inc. Company." September 14, 2022. https://business-essay.com/analysis-of-apple-inc-company/.


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BusinessEssay. "Analysis of Apple Inc. Company." September 14, 2022. https://business-essay.com/analysis-of-apple-inc-company/.