Apple Shareholder Letter

  This piece represents a letter I have composed to Apple Inc.’s shareholders regarding the company’s financial results for the 2013 fiscal year.

Dear Shareholders,

It is our pleasure here at Apple to share with you the financial results of the 2013 fiscal year. The support of our nearly 25,000 shareholders has been critical to Apple’s achievements this year and has allowed us to plan for the future. As promised, Apple continues to deliver the best personal computing experience for our customers through our signature hardware, software, and operating systems. Customer service and user-friendly design remain as key elements in Apple’s business strategy. Throughout the year 2013, Apple continued its legacy of innovation and remains a front runner in the technological world with product announcements such as the iPhone 5s and 5c, iPad Air (Apple’s fifth generation iPad) and iPad Mini with Retina display, and the introduction of Apple’s iWork productivity suite for free download on Mac models. The progress of our new products is measured and reported here in the results of this year’s financial record.   

Apple understands the importance in continuing its development of ground-breaking technologies to uphold its reputation as a world technology leader. The hard work of our dedicated staff and the support of stakeholders like you reflect Apple’s overall success.

Financial Results for 2013 Fiscal Year

Below you will find a list of our key financial results for the 2013 fiscal year:

 

·         $170.9 billion in net sales, a new high for the company and a nine percent increase over 2012.

·         Net income for 2013 was approximately $37 billion, an 11 percent decrease from last year.

·         Apple’s diluted earnings per share for this year came in at $39.75, a nine percent decrease when compared to 2012.

 

Our Numbers, Explained

For the year of 2013, Apple has focused on the constant development of existing products in order to increase personal computing ease and improve convenience when using Apple products. The growth in Apple’s net sales during 2013 was mainly driven by strong sales of the iPhone 5 and the continued sales of the iPhone 4 and 4s, the introductions of iPhone 5s and 5c, and the success of Apple’s new iPad mini, iPad air, and fourth generation iPad. Additionally, there was an increase in sales of services which has contributed to 2013’s increase in net sales as well. As stated above, Apple faced a decrease in net income as it compares to the 2012 fiscal year. This was primarily due to the introduction of new versions of existing products that required higher costs for manufacturing and production while the consumer price of these products remained the same or in some cases, were reduced. However, the year 2013 also posed promise for a bright and innovative future for Apple, with several cutting-edge product releases and the continued development of new versions and products.

 

 

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Updates and Product Growth

In September of 2013, we were pleased to release the newest versions of our most widely used product, the iPhone. These additions include the iPhone 5s and 5c, which now allows users to access apps such as iMovie, iPhoto, and iWork for free. The 5s and 5c include key enhancements from previous iPhone models such as a fingerprint sensor, improved camera application, and a better A7 processor.

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2013 also marked the launching of Apple’s newest versions of the iPad, including the iPad mini with retina display and the iPad air, the fifth generation of this product. These versions include improvements such as a significantly thinner and lighter design than its predecessors, advanced storage capabilities, and eight megapixel rear camera lenses.

Perhaps the most exciting release Apple debuted this year was the IOS7 software update in September 2013, which is compatible with iPhone 4 and up, iPad 2 and up, as well as iPod touch 5th generation. The new software is the most advanced of its kind and introduces features such as Airdrop for IOS, smarter multitasking, and control center. The best part of this new technology is that it adheres to Apple’s promise by making everyday tasks easier, faster, and more enjoyable.

So, What’s Next?

As an Apple shareholder, you understand that we are committed to bringing the best user experience to our customers through our innovative products and services. We aim to develop our own operating systems, hardware, application software, and services in order to provide our customers with new products and solutions that allow for superior ease-of-use and seamless integration. In adherence to this idea, Apple has several new products in the works to fulfill this mission in the coming year.

 

The iPhone 6 is perhaps the most anticipated upcoming Apple product, the release of which is set to occur in late 2014. This version of the iPhone will introduce many revolutionary features to the technological world and will set the standard exceedingly high for our competitors. We cannot wait for its debut and thus continuing our longstanding legacy of innovation.

That being said, we hope you will continue with us on this journey as our technology continues to advance. Apple’s success would be nothing without its shareholders, and for that we thank you. We are dedicated to the commitment we hold to bring its customers a superior computing experience around the world. While we are pleased with our current progress, we look forward to broadening our technological horizons with each coming opportunity.

Sincerely,

 

Tim Cook

CEO, Apple

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