Apple Computer Inc. is a designer and manufacturer of personal computers, software, peripherals, and music players. Its products include MacBooks, iMacs, iPods, and software such as OS X and iTunes. Apple has over 130 retail stores and leads the industry in innovation. It aims to spearhead the digital music revolution with the iPod and iTunes. Apple has strengths such as foreign market profits, brand name, innovation, and easy to use products. However, it faces weaknesses like quality control issues and high prices. Opportunities exist in expanding markets and developing new products, while threats include high competition.

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 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 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 2004-2005 -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