Apple Computers

Jessica Bourgoin
Amy Kakuk
Beth Theriault
04/25/2005
Outline

Brief History of HD

Where we are now

Vision and Mission

!ternal Analysis
" #$M
" %
" &ummary

'nternal Analysis
"
'%
" %inancial ratio analysis
" (et Worth Analysis
" &ummary

&trategic Analysis
"
&W)T Matri!
"
&$A#
"
*rand &trategy Matri!
"
' matri!
"
B#*
" &ummary
$ossi+le strategies
" ,&$M
-ecommendations
" &trategic im.lementation
and desired results
"
)+/ecti0es 1 *oals
History 234562347
Wozniak and Jobs form the Apple Computer Company on April Fool's
ay!
Wozniak and Jobs finish "ork on a preassembled #omputer #ir#uit
board! $t has no keyboard% #ase% sound or &raphi#s! 'hey #all it the
Apple( $!
'he Apple $ board is released for sale to hobbyists and ele#troni#s
enthusiasts at the pri#e of )***!**!
Apple's first formal business plan sets a &oal for sales to &ro" to )500
million in ten years! As it turns out% the #ompany "ill pass that mark in
half the time!
Apple $ #omputer boards are sold throu&h +0 retail stores in the ,!-!
Apple mo.es from Jobs' &ara&e to a buildin& on -te.ens Creek
/oule.ard in Cupertino% California!
'he ne" Apple( $$ is un.eiled at the first West Coast Computer Fair! $t
is the first personal #omputer able to &enerate #olor &raphi#s and
in#ludes a keyboard% po"er supply and attra#ti.e #ase!
'he Apple lo&o as seen today is desi&ned by 0ob Janoff% art dire#tor
for 0e&is 1#2enna Ad.ertisin&!
0e&is 1#2enna Ad.ertisin& laun#hes its first ad #ampai&n for Apple!
Althou&h ad.ertisin& is initially aimed at ele#troni#s enthusiasts%
Apple "ill soon be#ome the first #ompany to ad.ertise personal
#omputers in #onsumer ma&azines!
1onthly orders rea#h a )+ million annual sales rate!
htt.899www:a..le6history:com9frames9;
History 2347

A..le introduces 0arious interface cards for connecting

to most .rinters:

A..le<s Disk ''= is introduced at the #onsumer

lectronics &how: 't is the easiest to use> lowest .riced>
and fastest mini6flo..y disk dri0e e0er offered +y a
com.uter manufacturer: 't will make .ossi+le the
de0elo.ment of serious software: $roduction at first is
handled +y /ust two em.loyees> turning out ?@ dri0es a
day:

'n only its second year> A..le is one of the fastest

growing com.anies in America: &ales ha0e increased>
and its dealer network has grown to o0er ?@@:
History 234362372

A..le<s first .rinter> the &ilenty.e=> is introduced:

A..le o.ens a manufacturing .lant in #arrollton> TA: A..le facilities
now occu.y more than half a million sBuare feet of floor s.ace in the
C:&: and uro.e:
A..le goes .u+lic: Morgan &tanley and #o: and Ham+recht 1 ,uist
underwrite an initial .u+lic offering of D:5 million shares of A..le
common stock at a .rice of EFF .er share: 0ery share is +ought
within minutes of the offering> making this the largest .u+lic offering
since %ord went .u+lic in 23G5:
A..le<s em.loyee count +reaks 2>@@@:
A..le<s distri+ution network is the largest in the industry67@@
inde.endent retailers in the C:&: and #anada> .lus 2>@@@ outlets
a+road:
A..le<s first mass storage system> the GMB $ro%ileHtmI hard disk is
introduced> .riced at E?>D33:

A..le +ecomes a household name: &ur0eys show that .u+lic

awareness rose from 2@ .ercent to 7@ .ercent in 2372:
History 237F6237G
Apple ot 1atri3 printer introdu#ed for )2%+45!
Apple be#omes the first personal #omputer #ompany to rea#h
)+ billion annual sales rate! $t thro"s a 5/illion ollar 6arty5 for
employees!
Apple ,ni.ersity founded to pro.ide employee trainin&
pro&rams!
Apple enters the Fortune 500 at number 4++ in under fi.e years!
78A 97mployee 8olunteer A#tion: is #reated to mat#h the skills
of Apple employees "ith #ommunity needs!
Apple is ele#ted to the Consumers i&est ;all of Fame for
responsi.eness to #onsumer needs!
Apple $$ re#ei.es the +4<4 $ndustrial esi&n 73#ellen#e A"ard
9$7A: sponsored by the 6rodu#t $ndustrial esi&ners -o#iety
of Ameri#a!
Apple announ#es a #omputer trainin& s#holarship pro&ram for
elementary and se#ondary s#hool edu#ators!
History 23756233@
Apple announ#es plans to #reate an independent soft"are #ompany%
to be kno"n later as Claris!
For the first time% Apple uses its ;yperCard te#hnolo&y to distribute a
+4<= ;yperCard supplement on diskette for 1a#intosh personal
#omputers!
Apple files suit a&ainst 1i#rosoft and ;e"lett>6a#kard to prote#t its
1a#intosh audio .isual display! 'he la"suit is seen as ha.in& industry
"ide impli#ations re&ardin& #opyri&ht la"s!
Apple reports first billion dollar ?uarter in its history as net
in#ome rises +0< per#ent!
Apple reports net sales of )4!0= billion and net in#ome of )400!@
million for fis#al year +4<<!
Apple a#?uires Coral -oft"are Corp!% "hi#h markets pro&rammin&
lan&ua&es and artifi#ial intelli&en#e tools for 1a#intosh #omputers!
Apple introdu#es @2>/it Aui#kra"9tm: that allo"s 1a#intosh
personal #omputers to pro#ess and display photo>?uality do#uments%
ima&es and .isualizations "ith e3#eptional #olor #larity!
Apple donates )2 million in #omputers to 2@ s#hools to help at>risk
students!
Fis#al +440 re.enues surpass )5!5 billion!
History 23326233G

Apple announ#es it "ill restru#ture the #ompany o.er the ne3t

+2 months to redu#e operatin& e3penses! Apple's "orkfor#e is
redu#ed appro3imately +0 per#ent!
Apple and $/1 si&n a letter of intent to #ooperate on maBor
te#hnolo&y initiati.es for the +440s!
Apple% $/1% and 1otorola finalize milestone te#hnolo&y
allian#e!

Apple announ#es a ne" 'oken 0in& 4/+* C/ Card% for the

1a#intosh produ#t line! $t is the first produ#t to emer&e from
Apple and $/1 allian#e!
Apple and 2odak announ#e that they are "orkin& to&ether to
inte&rate support for 6hoto C ima&es into future .ersions of
Aui#k'ime!
'he ,!-! 7n.ironmental 6rote#tion A&en#y offi#ially releases
the 7ner&y -tar emblem for display "ith ener&y>effi#ient
#omputers and peripherals! Apple has more than 20 produ#ts
that meet the 76A's the te#hni#al re?uirements!
Apple's 1a#intosh #elebrates +0th birthdayD
As of January F@@G A..le has introduced the Mini
Mac and the i$od &huffle:
Apple in 2005

The A..le Mini Mac is a

com.act deskto.
com.uter: 't is F inches
tall and weights F:3l+s:
The Mini Mac starts at
ED33 and comes
standard with i#hat AV
deskto. 0ideo
conferencing> Mail>
Address Book>
,uickTime=> i&ync> and
a DVD $layer:
httpE//"""!apple!#om/pr/library/2005/Ban/inde3!html
*ra.hics from8 htt.899www:a..le:com9macmini9
1ini 1a#
i6od -huffle

The i$od shuffle is a

smaller 0ersion of the
original i$od: 't is much
smaller and lighter and
can dou+le as a .orta+le
C&B flash dri0e with u. to
2*B of storage s.ace to
+ack u. .ersonal files
and e!change them
+etween com.uters: %or
E33 you can .urchase the
G2FMB holding u. to 2F@
songs or the 2*B holding
u. to FD@ songs for /ust
E2D3:
Fraphi#s fromE httpE//"""!apple!#om/ipodshuffle/
httpE//"""!apple!#om/pr/library/2005/Ban/inde3!html
Mac )& A Tiger

)n A.ril F3> F@@G> the

Mac )& A Tiger will +e
released: This is an
ad0anced o.erating
system that reBuires a
Macintosh com.uter with
a $ower$# *?> *D or *G
.rocessor> Built6in
%ireWire> FG5MB of -AM>
and ?*B of a0aila+le
hard disk s.ace: 't cost
E2F3 for a single user
and E233 for a G license
family .ack
httpE//"""!apple!#om/ma#os3/ne"features/o.er200!html
A..le in the Market Has of D9FF9@GI
Gast 'radeE @5!50
52 Week Go"E +2!=5
52 Week ;i&hE 45!44
Apple had a 2E+ -to#k split on
02/2</05
Vision Statement (proposed)
'o be#ome the "orld "ide leader in
#omputer and mp@ player sales!
1ission -tatement HactualI
A..le ignited the .ersonal com.uter re0olution in
the 234@s with the A..le '' and rein0ented the
.ersonal com.uter in the 237@s with the
Macintosh: A..le is committed to +ringing the
+est .ersonal com.uting e!.erience to students>
educators> creati0e .rofessionals and consumers
around the world through its inno0ati0e hardware>
software and 'nternet offerings:
The Apple commitment to excellence is its mission to provide
computers and service (2) for people (1) that meet the highest
standards of value and reliability. Apple is one of leaders in the
computer industry and makes the best-selling computers in the orld
(!) ("). Apple provides the highest level of #uality and value for our
customers. Those are timeless fundamentals. $e also apply innovative
technology to our core business (%) to differentiate ourselves and make
our products irresistible to our customers& beneficial to society& and
profitable to our company ('). $e strive to provide additional
opportunities for groth and enrichment of company personnel hile
maintaining a ork environment for all employees (() that encourages
personal commitment and participation in support of achieving
excellence. $e are committed to being a good corporate citi)en& and
being openly honest ith all of our stakeholders (*). $e support
activities that help to build common understanding& enhance
excellence& and enable people to improve their lives and reinforce their
commitment to society (+).
1ission -tatement H$ro.osedI
73ternal Audit
Hpportunities
'ncrease in worms and
0iruses on $#s:

Jarge .o.ulation H*en A1KI

which are e!tremely
indi0idualistic and name
+rand conscious:
Weak ties with Microsoft
.roducts:
Downloada+le music and
M$? .layers are highly
marketa+le:

'ncrease sales of com.uters

online +y FG .ercent:
'ncrease sales of la.to.s +y
F@ .ercent:
'hreats
#om.anies not seeing A..le
as com.ati+le with their
software:

Dell and H$ are ma/or

com.etitors:
'ncreasing com.etition with
music downloads:
Dell does not in0ent +ut
.ro0ides com.uters at a more
cost effecti0e rate for
customers:

-ecessionL.rice of A..le
com.uters are higher:
'ntelMs future $entium release:
C61 I Competiti.e 6rofile 1atri3
Apple ,omputer -arket .ell
,ritical /uccess
0actors
$eight 1ating $eighted
/core
1ating $eighted
/core
1ating $eighted
/core
Market Share
Price
Financial Position
Product Quality
Consumer Loyalty
Advertising
Management
Global Exansion
!nnovation
"eb #eveloment
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Total 1.22 2.(' 2."2 ".21
73ternal Fa#tor 7.aluation 97F7: 1atri3
3ey 4xternal 0actors $eight 1atin
g
$eighted
/core
5pportunities
!ncrease in -orms and virus on PCs% $%&' ( $%)$
#o-nloadable music and MP+ layers are highly marketable% $%) + $%&,
Large oulation .Gen / 0 12 -hich are extremely individualistic and name
brand conscious%
$%&' ( $%)$
!ncrease in sales o3 latos by *$ ercent% $%$( + $%&*
!ncreasing sales o3 comuters online by *' ercent% $%$' + $%&'
Creating more ties -ith Microso3t roducts% $%&$ ( $%($
Threats
!ncreasing cometition -ith music do-nloads% $%$4 * $%&(
!ntel5s 3uture Pentium release% $%$+ + $%$6
#ell and 7P are ma8or cometitors% $%&$ ( $%($
#ell does not invent but rovides comuters at a more cost e33ective rate 3or
customers%
$%$) + $%&,
9ecession:rice o3 Ale comuters are higher% $%$( * $%$,
Comanies not seeing Ale as comatible -ith their so3t-are% $%&' * $%+$
T5TA6 1.22 ".2%
73ternal -ummary
A..le has rated the 'ncrease in worms and
0irus on $#s> Jarge .o.ulation H*en A 1 KI
which are e!tremely indi0idualistic and name
+rand conscious> and the #reating more ties
with Microsoft .roducts as their three highest
o..ortunities:
A..le has rated that the fact of Dell and H$
+eing such huge com.etitors as their to.
threat:
$nternal Audit
-tren&ths
iTunes Music &tore is a good
source of re0enue> es.ecially
with the i$od and the a0aila+ility
on Windows .latform:
De0elo.ing own software and
hardware:
A..leMs niche audience .ro0ides
the com.any with some
insulation from the direct .rice
com.etition:
-e0am.ing deskto. and
note+ook lines:
We+ technology can +e used to
im.ro0e .roduct awareness and
sales:
Jow de+tLmore maneu0era+le:
*ood +rand loyalty:
Weaknesses
Weak relationshi. with 'ntel and
Microsoft:
Weak .resence in +usiness arena:
De.endency on new .roduct
launches:
Weak .resence in markets other
than education and .u+lishing:
&low turn around on high demand
.roducts:
$nternal Fa#tor 7.aluation 9$F7: 1atri3
3ey 7nternal 0actors $eight 1ating $eighted
/core
/trengths
i;unes Music Store is a good source o3 revenue< esecially -ith the iPod and the
availability on "indo-s lat3orm%
$%&' ( $%)$
Ale5s niche audience rovides the comany -ith some insulation 3rom the
direct rice cometition%
$%&$ + $%+$
9evaming deskto and notebook lines% $%&$ + $%+$
Lo- debt:more maneuverable% $%$) ( $%*(
#eveloing o-n so3t-are and hard-are% $%&( + $%(*
Good brand loyalty% $%$' + $%&'
"eb technology can be used to imrove roduct a-areness and sales% $%&$ ( $%($
$eaknesses
#eendency on ne- roduct launches% $%$) & $%$)
"eak resence in business arena% $%$4 & $%$4
Slo- turn around on high demand roducts% $%$+ * $%$)
"eak relationshi -ith !ntel and Microso3t% $%&$ & $%&$
"eak resence in markets other than education and ublishing% $%$( * $%$,
Total 1.22 2.!+
Finan#ial 0atio Analysis HMarch F@@DI
,ompany 7ndustry /ector /89 '22
:aluation 1atios
P=E 9atio .;;M2 )6%4$ *)%,4 ++%'* *(%$&
P=E 7igh > Last ' 1rs *44%6) '(%', )(%&( ('%(&
P=E Lo- > Last ' 1rs )%,( &4%+( &6%'' &)%*)
?eta &%4' &%)$ &%6& &%$$
Price to Sales .;;M2 &%(& &%,( '%$, +%++
Price to ?ook .M9Q2 *%*$ 4%') (%4, (%*6
Price to ;angible ?ook .M9Q2 *%*) ,%44 )%'+ 4%')
Price to Cash Flo- .;;M2 +4%)( &6%)6 *'%(, &4%+*
Price to Free Cash Flo- .;;M2 ('%&+ *+%44 *,%*) *,%64
@ A-ned !nstitutions )+%*& '$%+& (,%&( )(%&6
.ividends
#ividend 1ield B=A $%4$ $%4' *%$(
#ividend 1ield > ' 1r Avg $%$$ $%+( $%*4 &%(,
#ividend ' 1r Gro-th 9ate BM 4%6( &%'$ )%(,
Payout 9atio .;;M2 $%$$ 4%66 6%+( *)%4,
www:in0estor:stock.oint:com
;roth 1ates < ,ompany 7ndustry /ector /89 '22
Sales .M9Q2 vs Qtr & 1r Ago +)%*, &*%'( &,%,6 &+%($
Sales .;;M2 vs ;;M & 1r Ago &'%(' &$%64 &&%4, &&%6$
Sales > ' 1r Gro-th 9ate $%,, 4%$6 &(%'* 6%+$
EPS .M9Q2 vs Qtr & 1r Ago B=A +(%$$ +'%$4 *,%)6
EPS .;;M2 vs ;;M & 1r Ago ',4%$( +'%'' (&%4( *&%6*
EPS > ' 1r Gro-th 9ate >*6%&) )%,' &+%&, &*%&'
Caital Sending > ' 1r Gro-th 9ate *,%6' *%)' &%66 (%$)
0inancial /trength
Quick 9atio .M9Q2 *%*) &%$* *%'( &%*)
Current 9atio .M9Q2 *%'+ &%*' +%$* &%4)
L; #ebt to ECuity .M9Q2 $%$$ $%+, $%*+ $%),
;otal #ebt to ECuity .M9Q2 $%$4 $%'* $%*6 $%,'
!nterest Coverage .;;M2 &+%4' &&%+( 6%,& &&%,)
9rofitability 1atios <
Gross Margin .;;M2 *4%*4 +$%)$ '&%4& (4%+*
Gross Margin > ' 1r Avg *)%)' +&%$, '&%&+ (4%$&
E?!;# Margin .;;M2 +%+( &*%(+ &,%(& *$%46
Finan#ial 0atios 9#ont:
E?!;# > ' 1r Avg *%,4 &*%&, &)%&, *$%,*
Aerating Margin .;;M2 &%)+ ,%4$ &+%)+ *$%++
Aerating Margin > ' 1r Avg &%*' ,%*, &&%)* &,%+'
Pre>;ax Margin .;;M2 *%44 6%(4 &'%6) &4%*4
Pre>;ax Margin > ' 1r Avg '%+( 6%4) &(%44 &4%'(
Bet Pro3it Margin .;;M2 *%$+ )%$* 6%6$ &+%&*
Bet Pro3it Margin > ' 1r Avg (%*( )%'' ,%)4 &&%'6
E33ective ;ax 9ate .;;M2 *)%4( *6%'4 *4%'4 +&%+&
E33ective ;ax 9ate > ' 1r Avg **%)* +$%'6 +*%+6 +(%*$
-anagement 4ffectiveness <
9eturn on Assets .;;M2 *%$6 ,%(( )%$4 )%($
9eturn on Assets > ' 1r Avg '%(4 6%*' '%46 )%46
9eturn on !nvestment .;;M2 +%$' &)%'( ,%4' 6%64
9eturn on !nvestment > ' 1r Avg 4%6$ &4%'4 6%+$ &$%6+
9eturn on ECuity .;;M2 +%*) +$%&$ &*%&4 &,%4&
9eturn on ECuity > ' 1r Avg &$%+4 +&%4, &+%&& &6%**
4fficiency
9evenue=Emloyee .;;M2 )&4<4)$ '),<)*( ($&<4,4 )**<,))
Bet !ncome=Emloyee .;;M2 &*<''' +4<4** )'<(4( ,&<4$4
9eceivable ;urnover .;;M2 &&%'6 4%*' 4%)( 6%4)
!nventory ;urnover .;;M2 6&%(4 *$%6+ 6%)( &$%()
Asset ;urnover .;;M &%$+ &%(' $%44 $%6*
Finan#ial 0atios 9#ont:
Cet Worth Analysis
& N Additional .aid in ca.ital N retained earnings D>@3GM N 223M NF>?FGO *!5/
39F79@F (et income ! G5GM ! G O @251
&hare .rice H2@9249@?I9 $& H2@9249@?I ! a0g: net income H?yearsI
PFF:4G9 @:D3Q ! F4GM O
+2!=/
(um+er of shares outstanding ! share .rice
?G7>3G7>373 ! FF:4G O <!+/
1ethod a.era&e J *!4/
'nternal &ummary
A..le has rated their iTunes Music &tore +eing a good source of
re0enue> es.ecially with the i$od and the a0aila+ility on Windows
.latform> their low de+tLmore maneu0era+le> and their We+
technology +eing used to im.ro0e .roduct awareness and sales as
their ? highest strengths:
A..le did not rate any of their weaknesses higher than a F: they
should work on +eing a+le to direct more attention to those areas
and es.ecially concentrate on the two areas of de.endency on new
.roduct launches and the weak .resence in +usiness arena:
-WH' 1atri3
->H -trate&ies
'ncrease awareness through the
we+ of the immunity of Mac .roducts
to worms and 0iruses: H&G> )2I
Ad0ertise using indi0iduals that will
link *eneration A 1 K to the iTunes
and other related .roducts: H&2> )F>
)D> )G> )5I
Csing mo0ies and music grou.s that
are geared towards *en A and K to
.romote com.uters and la.to.s:
H&?> &G> )F> )G> )5I
->' -trate&ies
'ncrease and .romote the
com.ati+ility to Window o.erating
system: H&G>T2I
$romote the originality of A..le
com.uters and the different style
and sta+le system that is slightly
more +ut worth the .rice difference
in style> sta+ility and s.eed: H&F> &G>
TF> TD> TGI
W>H -trate&ies
'ncrease ties with Microsoft and
'ntel and their .roducts:HW2> WF>
WD )F> )?I
$romote to +usiness the safety of
ha0ing a worm and 0irus free
com.uter +y using Mac: HWF> WD>
)2> )G> )5I
W>' -trate&ies
'm.ro0e relationshi. with Microsoft
and 'ntel so that com.anies will
see them as com.ati+le: HW2> WF
T2I
'ncrease .roducti0ity and turn
around of high demand .roducts
to com.ete with Dell and H$ HWG>
TFI
-6AC7 1atri3
ES
!S CA
FS
Conservative
#om.etiti0e Defensi0e
Aggressi0e
-pa#e 1atri3
0orard 7ntegration
=ackard 7ntegration
>ori)ontal 7ntegration
-arket 9enetration
-arket .evelopment
9roduct .evelopment
?oint :enture
Frand -trate&y 1atri3
9AP!# MA9DE;
G9A";7
Quadrant !! Quadrant !
"EAD S;9ABG
CAMPE;!;!EE CAMPE;!;!EE
PAS!;!AB PAS!;!AB


Quadrant !!! Quadrant !E
SLA" MA9DE;
G9A";7
Apple
Computer
,oncentric .iversification
,onglomerate
.iversification
>ori)ontal .iversification
1etrenchment
.ivestiture
6i#uidation
'he $nternal>73ternal 9$7: 1atri3



&%$ to &%66

!/ E!!! E!!
Lo-

*%$ to *%66
E! E !E
Medium

+%$ to +%66

!!!
!! !
7igh

&%$ to &%66 *%$ to *%66 +%$ to (%$

"eak Average Strong
Fro" and
/uild
-e&ments 0e.enue 6rofit 7F7 $F7
Domestic GDR GFR ?:G F:5
'nternational D5R D7R ?:@ ?:@
Dogs Cash Cows
Medium
$


Question Marks Stars
7igh F*$




/oston Consultin& Froup 9/CF: 1atri3

Jow 6F@
High 2:@ Medium :G@ Jow @:@
'nternational
Domestic
-e&ments 0e.enue 6rofit 7F7 $F7 Fro"th 0ate 0elati.e 1arket
-hare
Domestic GDR GFR ?:G F:5 24 @:?
'nternationa
l
D5R D7R ?:@ ?:@ G @:F
#ash need High
0s: cash flow low
Market $enetration
Market
De0elo.ment
$roduct
De0elo.ment
&ell
Alternative /trategies !E SPACE G9AB# CAGB;
0orard 7ntegration S S F
=ackard 7ntegration S S F
>ori)ontal 7ntegration S S F
-arket 9enetration S S F
-arket .evelopment S S F
9roduct .evelopment S S F
,oncentric .iversification S 2
,onglomerate .iversification S 2
>ori)ontal .iversification S 2
?oint :enture S 2
1etrenchment S 2
.ivestiture S 2
6i#uidation S 2
1atri3 Analysis -ummary
A-61
3ey 7nternal 0actors
$eight
/tart
producing
$intel
compatible
4xpand
production into
Asia
/trengths A/ TA/ A/ TA/
i;unes Music Store is a good source o3
revenue< esecially -ith the iPod and the
availability on "indo-s lat3orm%
$%&' &%$$ $%&' +%$$ $%('
Ale5s niche audience rovides the
comany -ith some insulation 3rom the
direct rice cometition%
$%*$ (%$$ $%,$ +%$$ $%)$
Good brand loyalty% $%*$ (%$$ $%,$ +%$$ $%)$
"eb technology can be used to imrove
roduct a-areness and sales%
$%&' (%$$ $%)$ +%$$ $%('
$eaknesses
"eak relationshi -ith !ntel and Microso3t% $%&' (%$$ $%)$ &%$$ $%&'
"eak resence in markets other than
education and ublishing%
$%&' *%$$ $%+$ (%$$ $%)$
/@=T5TA6 1.22 ".2' 2.+'
3ey 4xternal 0actors
$eight
/tart producing
$intel
4xpand production
into Asia
5pportunities A/ TA/ A/ TA/
!ncrease in -orms and virus on PCs% $%&' F :?@ ? :DG
#o-nloadable music and MP+ layers are highly
marketable%
$%$) &%$$ $%&* (%$$ $%(,
Large oulation .Gen / 0 12 -hich are extremely
individualistic and name brand conscious%
$%&' &%$$ $%&$ (%$$ $%($
!ncrease in sales o3 latos by *$ ercent% $%$, &%$$ $%$, (%$$ $%+*
Creating more ties -ith Microso3t roducts% $%&$ (%$$ $%&* *%$$ $%$,
Threats
!ntel5s 3uture Pentium release% $%&$ &%$$ $%&$ +%$$ $%+$
#ell does not invent but rovides comuters at a more
cost e33ective rate 3or customers%
$%$) &%$$ $%$) +%$$ $%&,
Comanies not seeing Ale as comatible -ith their
so3t-are%
$%&' &%$$ $%$' +%$$ $%&'
/@=T5TA6 1.22 2.(" 2!@*
/@- T5TA6 ATT1A,T7:4A4// /,514 %.1+ '.21
A-61
0e#ommendations
-trate&y +
).en si! com.uter retail stores Hnot /ust .eri.heral and accessoriesI: A..le currently has
stores o.ened throughout the Cnited &tates with only .eri.heral and accessories for their
com.uters: Adding the hardware should generate more hands6on awareness and use
already esta+lished locations:
This will increase .roduct accessi+ility for those who wish to 0iew items other than /ust
accessories and increase awareness of the originality of A..leMs .roducts:
F .ercent increase o0er the ne!t F years in sales re.resentati0es for the com.uter
hardware:
-trate&y 2
#ontract music s.okes.erson to attract the u.coming generation who are attending high
school and college: This will in0oke a sense of style and linking a..le with a distincti0e and
memora+le to. 2@ hit: This will stay in the customerMs awareness and influence future
.urchase decisions:
#ontracting one music s.okes.erson estimated E5 million:
-trate&y @
Add more features to current .roducts for greater Wintel com.ati+ility: %eatures such as
iTune software com.ati+le with windows +ased com.uters> )ffice .rograms loada+le from
$# installation disk HThis would reBuire a software agreement with MicrosoftI: 'n late
)cto+er F@@? A..le released an iTune software .ackage that is $# ready:
't will increase the Cnited &tates market share at least ?@ .ercent for the ne!t F6?
years:
EG@ million is the estimated cost for -esearch and De0elo.ment:
Cost of 0e#ommendations
Hpen * #omputer retail stores 9not
Bust peripheral and a##essories:
Contra#t musi# spokes person
9-arah 1#Ga#hlan K 50 #ent: for a
#ost of
-tart produ#tion of Wintel
#ompatible soft"are for a #ost of
'otal e3pe#ted #ost J
2@@M
5M
G@M
+5*1
$&9B'T Analysis

Common Stock
Financing
Debt Financing 50/50 Combination
Financing

High Low High Low High Low
4=7T
22&222.2
2
*&222.22 22&222.2
2
*&222.22 22&222.2
2
*&222.22
7nterest (*<)
2.22 2.22 "&(22.22 "&(22.22 1&('2.22 1&('2.22
4=T
22&222.2
2
*&222.22 1*&122.2
2
2&122.22 1+&2'2.2
2
%&2'2.22
Taxes ("2<)
*&222.22 1&+22.22 %&+"2.22 *"2.22 '&%1'.22 1&21'.22
4AT
1%&222.2
2
%&222.22 11&2!2.2
2
1&%!2.22 12&*"'.2
2
2&+"'.22
B /hares
'&*'".22 '&*'".22 1&+"!.22 1&+"!.22 "&!%!.22 "&!%!.22
49/
2.%+ 2.!% *.1% 2.+2 "."! 2.!*
)+/ecti0es and *oals

)0er the ne!t ?6D years A..le would like

to increase their .roduct accessi+ility Hnew
storesI:

'ncrease their market share +y ?@R

liminate the need for new .roducts in

order to raise sales:
Apple in the Ce"s

April +2% 2005 A..le Announces Mac )& A &er0er TTigerU

February 2@% 2005A..le Cn0eils (ew i$od mini &tarting at

Just E233

February +4% 2005A..le Honors *-AMMK Award Winning

Artists

February ++% 2005A..le Announces Two6for6)ne &tock

&.lit