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26 10 2016

The iPhone Company
Shifting from hardware to services

The registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Apple’s SEC filing for the fiscal year 2016 again shows that the company’s net sales are predominantly generated by just one product, the iPhone. Thanks for reporting, Luca.

Stats about Apple are always the starting point for peerless lessons in leadership. No other tech company is as successful as Apple if we look at parameters like profit, environment, responsibility in different areas, innovation, disruptive technology, code of conduct, cult, etc.

Different to many other competitors, Steve Jobs, Tim Cook, and all the other excellent employees followed a philosophy. Continuity over decades let this company grew up to the most valuable brands in the world. Apple is a mega brand right in the middle of the epicenter of technology, the Californian Silicon Valley.
Statements like

Apple’s brand is just overwhelming here.
It’s not about specifications. It’s not about rationale. It’s about owning an iPhone.
(Eiji Mori, a Tokyo-based analyst at BCN Inc.)

always incite platform wars when published in social media. Users of Apple devices always get nothing but scorn and derision if Fandroids read those lines.

Everybody is entitled to make his decision up to his requirements but also must be able to retrieve reliable data about companies when it comes to assessments or any financial engagement.

The SEC …

As the leading industrial nation the USA developed rules for financial reports which are basically overtaken by other countries (even Germany, the country which is well-known for it’s very special and complex legislation not really understood by normal people). The responsible commission in the USA is the SEC (U.S. Securities and Exchange Commission). The laws and rules that govern the securities industry not only in the United States but also in all other industrialized countries derive from a simple and straightforward concept:

All investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it.

To achieve this, the SEC requires public companies to disclose meaningful financial and other information to the public.
This provides a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular security. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions.

Numbers …

In Apple’s SEC 10-K filings (Annual financial statement) you will find the most important numbers, the unit sales of the iPhone. This device still is the product that boosts the company’s success.


With Apple’s spreadsheet app Numbers (part of iWork) I put these numbers into a table and used ‘Create chart’ from the context menu to create the bar graph. In a last step I inserted some images from the camera roll and added text fields to explain it all.

Now it’s the task of analysts to breathe life into Apple’s declining numbers.

Note
iWork for iOS is an example for the added value Apple gives its customers when buying a mobile device like an iPhone or an iPad. It’s free and the company justifies this decision simply with an improvement of the user experience. It’s just one example for a sophisticated business strategy to delight customers.

More about financial reporting

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