Organizational Layout and Revenue Contribution for Apple, Inc.

Apple Store

Image via Wikipedia

Organizational Chart
An organizational chart, also called an org chart, is a diagram that shows the structure of an organization.  The chart also shows relationships between different divisions in an organization and the ranks of the divisions.

Source: http://www.orgchart.net/wiki/Main_Page

Below is an organizational chart of Apple, Inc. and the revenue generated from the divisions within the company in 2010.

The divisions and their contributions include:
1.  iPhone Related Products – $25,179,000,000
2.  Macintosh Sales – $17,479,000,000
3.  iPod – $8,274,000,000
4.  iPad & Related Products – $4,958,000,000
5.  Other Music Related Products – $4,948,000,000
6.   Software Service – $2,573,000,000
7.  Peripheral & Hardware – $1,814,000,000
Total Revenues for 2010 was $65,225,000,000

(Click on image to enlarge)

Source: Disclosure from LexisNexis

 

Revenue Contribution

The organizational chart above showed the revenue contributions for each segment of Apple, Inc.  Below is a pie chart of the same information, but shown as a percentage of Apple’s total revenue for 2010.

(Click on image to enlarge)


Source: Disclosure from LexisNexis

As you can see from the graph, iPhone Related Products (38.6%) and Macintosh Sales (26.8%) make up the majority of revenue generated for Apple, Inc.

Enhanced by Zemanta

Apple, Inc. Mission Statement, Business Description, and Company Vision

Image representing Apple as depicted in CrunchBase

Image via CrunchBase

Mission Statement:  “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.”
Source: FAQ on Investor Relations Apple Inc. Website

Business Description:
“Apple has an “i” for revolutionary technology. Since its release, the company’s iPhone has spurred a revolution in cell phones and mobile computing. It also continues to innovate its core Mac desktop and laptop computers — all of which feature its OS X operating system — including the iMac all-in-one desktop and MacBook portable for the consumer and education markets, and the high-end Mac Pro and MacBook Pro for consumers and professionals involved in design and publishing. Apple scored a runaway hit with its digital music players (iPod) and online music store (iTunes). Its iPad tablet computer could become another game-changer in the consumer market. Apple gets more than half of its sales from outside the US.”
Source: Hoover’s Inc.

“Apple Inc. (Apple) designs, manufactures and markets a range of personal computers, mobile communication and media devices, and portable digital music players, and sells a range of related software, services, peripherals, networking solutions, and third-party digital content and applications. It’s products and services include Macintosh (Mac) computers, iPhone, iPad, iPod, Apple TV, Xserve, a portfolio of consumer and professional software applications, the Mac OS X and iOS operating systems, third-party digital content and applications through the iTunes Store, and a range of accessory, service and support offerings. The Company sells its products globally through its retail stores, online stores, and direct sales force and third-party cellular network carriers, wholesalers, retailers, and value-added resellers. As of September 25, 2010, the Company had opened a total of 317 retail stores, including 233 stores in the United States and 84 stores internationally.”
Source: LexisNexis Company Disclosure

Vision Statement:  “We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.”
Source: CEO Tim Cook said this during a conference call with investor.  Found on the Apple Discussion Board.

Enhanced by Zemanta

Remarkable Apple Products

Apple Store in Downtown Montreal

Image via Wikipedia

Watch this short video of photos of some amazing Apple products!  Most of these pictures were taken of products at the Apple Store in Orland Park, Illinois.  The rest of the photos are taken of products that my family and I own.  Products in this video include the iPod, iPod Touch, MacBook, and iPad.

This video was created using One True Media.

Enhanced by Zemanta

Market Shares of the Key Players in the Computer Manufacturing Industry

computer monitor

Image by Mediajon via Flickr

The major companies in the Computer Manufacturing Industry are Hewlett-Packard, Dell, IBM, Apple, and Oracle.  These companies make up approximately 80% of the market share.  The industry, as a whole, has had an annual growth rate of -2.5% from 2006 to 2011.  The growth rate is expected to fall to -6.9% from 2011-2016.

Market Share

Market share is the percentage of an industry or market’s total sales that is earned by a particular company over a specified time period.  To calculate market share, you take the company’s sales over the period and dividing it by the total sales of the industry over the same period. This metric is used to give a general idea of the size of a company to its market and its competitors.
Source: Investopedia.com

It is important to look at the concentration of the Computer Manufacturing Industry, because the more concentrated a market, the more market share one company has which may lead to a monopoly and less competition.

Herfindahl-Hirschman Index

To find the concentration of a company, you must calculate the Herfindahl-Hirschman Index (HHI).  It is calculated by squaring the market share of each firm competing in a market, and then summing the resulting numbers. The HHI number can range from close to zero to 10,000.

HHI for Computer Manufacturing Industry
- Hewlett-Packard: 25.1%
- Dell: 21.5%
- IBM: 15.4%
- Apple: 14.3%
- Oracle: 4.6%
Square each of these numbers and add them together:
630.01 + 462.25 + 237.16 + 204.49 + 21.16 = 1,555.07

“The U.S. Department of Justice considers a market with a result of less than 1,000 to be a competitive marketplace; a result of 1,000-1,800 to be a moderately concentrated marketplace; and a result of 1,800 or greater to be a highly concentrated marketplace.”
Source: Investopedia.com

The Computer Manufacturing Industry has an HHI score of 1,555.07, meaning the industry is moderately concentrated.  Companies find this number important because they want to have a part in many industries in case one industry is more concentrated.  On the graph below, you can see that the industry is moderately concentrated because there are five key competitors owning approximately 80% of the market share combined.

Market Share information from IBISWorld Industry Report (Industry 33411a)

 

Enhanced by Zemanta

Select External Environment Factors Influencing the United States Computer Manufacturing Industry

The Computer Manufacturing Industry is responsible for the manufacturing, designing, and assembly of personal computers (PCs), laptops, handheld computers and servers.  The revenue for this industry is expected to decline at an average annual rate of 2.5% over the period.  However, demand for computers has increased over the past five years as more Americans start to own computers.  The fierce competition between companies in this industry, like Apple, HP, and Dell, drive them to continuously differentiate their products from the rest.

 

 

Click on image to expand view

(Information from IBISWorld 33411a Computer Manufacturing in the US Industry Report)

Enhanced by Zemanta

Strengths and Weaknesses Comparison of Apple Inc., Google Inc., and Hewlett-Packard

Apple Inc.
(AAPL)

Google Inc.
(GOOG)

Hewlett-Packard Company
(HPQ)

Strengths

Strong brand image provides an edge over competitors- Brand ranked 20th position in 2009 from 24th in 2008 and 35th in 2007
- In 2008, brand value improved to $15,433 from $13,724 million in 2008 and $11,037 million in 2007
- April 2010, the company sold 300,000 iPads on the first
day of its launch in the USRobust financial performance strengthens investors’ confidence and provides capital for future growth avenues- Total revenue
increased to $42,905 million in FY2009 from $24,578 million in 2007, annual growth rate (CAGR) of 32.1%
- Operating profits of $11,740 million in FY2009, $8,327 million in FY2008 and $4,407 million in FY2007
- Operating profit margin has improved to
27.4% in 2009 from 22.2% in 2008 and 17.9% in 2007
- Net income
margin improved to 19.2% in 2009 from 16.3% in 2008 and 14.2% 2007Focused R&D driving innovation and consolidating its market position
-R&D expenditure was $1,333 million in 2008, $1,109 million in 2008, and $782 million in 2007
- Focused on future development of its existing Mac products
Significant brand image- Brand valued at $100 billion making it the world’s first $114,260 million brand
- Ranked Google 7th in 2009, up from 10th in 2008 in Interbrand’s Top 100 Global Brands
- Interbrand valued Google at $31,980 in 2009Strong infrastructure base- Advertising revenues from Google websites accounted for 67% of its total revenues in FY2009, compared to 66% and 64%, respectively in 2008 and 2007
- Revenue contribution of $15,722.5 million in FY2009, $14,413.8 million in FY2008, and $10,624.7 million in FY2007
- IT assets base of $3,868.3 million in FY2009, compared to $3,573.5 million in FY2008Robust financials

- Revenues increased from $16,594 million in FY2007 to $23,650.6 million in FY2009
- Annual growth rate (CAGR) of 19% for 2007-09
- Net profit margin increased from 30.6% and 25.3% in FY2007 to 35.1% and 27.6% in FY2009
- FY2009, cash and cash equivalents was $10,197.6 million compared to $6,520.4 million in FY2007
- Stockholders’ equity increased from $22,689.7 million in FY2007 to $36,004.2 million in FY2009

Strong market position- Took market leadership from Dell in global PC market in 2006 and kept position through 2010
- 2010, 18% market share of global PC market followed by Dell (13%), Acer (12%), and Lenovo (10%)
- Shipped approximately 64 million in PCs in 2010Successful inorganic growth- Merger with Compaq Computer in 2002 resulted in revenue increase from $48.8 billion to $87 billion
- Acquisition of Mercury Interactive in 2006 valued at approximately $4.5 billion
- Acquisition of EDS valued at $13.9 billion made HP leader in IT services market
- April 2010, acquired 3Com, valued at approximately $2.7 billion
- September 2010, acquired Fortify Software for approximately $2.35 billionSignificant brand recognition- Ranked 10 in the list of top 100 Best Global Brands 2010
- Valued at $26,867 million in 2010, increase of 12% over 2009
- Future 500 ranking, HP ranked 10th in 2010

Weaknesses

Patent infringement lawsuit may affect financial condition and operating results- 2010, Nokia filed a revised suit against Apple claiming Apple infringed Nokia’s patents on almost all mobile phones, portable music players, and computers
- Motorola Mobility filed complaints against Apple for patent infringement of certain productsProduct recalls may harm Apple’s reputation and add significant warranty and other expenses- 2010, antenna problems in iPhone 4 smartphone demands for product recall
-2008, Ultracompact USB Adapter Exchange Program because the adapter’ metal prongs broke off and remained in power outlet, causing risk of electric shock
Lack of product integration- Company has focused more on launching new products than integrating products
- Many new products, but few of them have anything in common with the others
Lack of significant presence in various market segments- Company’s portfolio of offerings lack significant software product or management consulting services
- Way behind competitors, including Apple, Samsung Electronics, and Acer
- Google Android and Chrome OS capture 36% of the smartphones and tablet-style devices by 2015. Apple’s iOS with 35%
- May affect competitiveness and make it dependent on othersDATA ACQUIRED BY DATAMONITOR
Enhanced by Zemanta