Apple Investor Relations Material

Apple is one of the largest companies in the world, mostly known for its success with the iPhone and its minimalistic and gracious designs of hardware products. Besides the iPhone segment, Apple has several revenue streams such as selling PCs, tablets, wearable devices, accessories, and services attached to the hardware product suite. The most well known products include the iPhone, Mac, iPad, Apple Watch, and AirPods. And Apple’s service segment ranges from Advertising, AppleCare, Cloud Services, Digital Content, to Payments. Given the company’s gigantic size, it is also a part of the famous FAANG cohort, which apart from Apple also consists of Facebook (Meta), Amazon, Netflix, and Google (Alphabet).

Apple’s headquarters are located in Cupertino, California, right in the middle of Silicon Valley. The building has the shape of a circular groundscraper with a circumference of one mile, as Steve Jobs did not want the HQ to look like a business park, but more like a nature refuge.

The culture has been very informal ever since the company was founded, with many similarities to a startup rather than a multinational corporation. An example of this informality is that even though Apple was a Fortune 500 company, Jobs often strolled around the office barefoot. This culture of operating decentralized in a non-bureaucratic way became a key trait that has differentiated Apple from its competitors in terms of innovation.

On April 1, 1976, the college dropouts Steve Jobs, Steve Wozniak and Ronald Wayne founded Apple Computers Inc. Their vision was to change the way people interacted with computers, and they wanted to make the PC’s small enough to fit in people's homes or offices. Simply put, they wanted to create a user-friendly device.

Further reading: Steve Jobs' 2005 Stanford Commencement Speech

The three founders started building the first iterations of the Apple computer in Jobs’s garage, and sold them without keyboard, monitor and casing. The release of Apple II, the first ever PC with color graphics, is today viewed as one of the most revolutionizing steps for the computer industry.

In December 1979, Jobs and several other Apple employees visited Xerox PARC, to see the Xerox Alto, which was a computer with a graphical user interface (GUI). Jobs became convinced that GUI was the future for computers during this visit, which led him and Apple into developing a GUI for the computer Apple Lisa, named after Jobs’s daughter. A couple of years laters, when Apple released the Macintosh in 1984, the company made a $1.5 million investment in the TV-ad “1984”. This ad is considered one of the greatest ever and is seen as one of the watershed events for Apple’s successes.

On February 9, 1997, Apple finalized the acquisition of NeXT, which at the time was an American tech company specialized in PC workstations. NeXT was founded in 1985 by Steve Jobs after being forced out of Apple. They produced its first product in 1988, the NeXT computer, followed by the NeXTcube and the NeXTstation in 1990. These were highly influential computers at the time, and established new trends within computer innovation with their object-oriented programming and GUI. The advanced software, the NeXTSTEP operating system, later became the foundation of Mac OS X.

The deal amounted to $429 million in cash and $1.5 million worth of Apple stock, and Jobs was given a role as advisor and interim CEO at Apple through the acquisition. He immediately reviewed the product suite and canceled 70% of the production which resulted in cutting 3,000 employees. Under the leadership of Jobs, Apple turned from being near bankruptcy to incredible innovation and success, and shortly thereafter became one of the world’s most valuable companies with its iconic array of products and services.

By the end of 2020, Apple already had released four new iPhones during the fall, but CEO Tim Cook was not done with flooding homes with tech. An additional two new MacBooks and a Mac Mini were released, holding the new custom-made M1 silicon chip. The system on a chip (SoC) solution is designed to be used in Apple’s own consumer hardware products. By using its own chips, Apple has improved its margins following the decreased dependency on chip suppliers such as Intel. The M1 chips have given PCs largely better performance as well as only using 25% of the power compared to the predecessor. This chip series is now included in most new Macbooks as well as the iPhone, iPad, Apple TV, and Apple Watch.

Given that the company likes to have a tightly-knit eco-system of products, the transition to its own silicon chips was not surprising. Apple is outsourcing the manufacturing of the chips but fully controls the integration with the company's hardware and software. This enables them to design and customize both hardware and software in its products, which as you have understood by now, lies at the innermost core of Apple.