iPhone OS from Apple Inc (10 7% Market Share Sales Q4 2008)
The iPhone uses an operating system called iPhone OS, which is derived from Mac OS X Third party applications were not officially supported until the release of iPhone OS 2 0 on July 11th 2008 Before this,"jailbreaking" allowed third party applications to be installed, and this method is still available
Linux operating system (8 4% Market Share Sales Q4 2008)
Linux is strongest in China where it is used by Motorola, and in Japan, used by DoCoMo [28][29] Rather than being a platform in its own right, Linux is used as a basis for a number of different platforms developed by several vendors, including Google's Android, LiMo, and TrollTech, which are mostly incompatible [30][31] PalmSource (now Access) is moving towards an interface running on Linux [32] Another platform based on Linux is being developed by Motorola, NEC, NTT DoCoMo, Panasonic, Samsung, and Vodafone [33]
Palm webOS and Palm OS (developed by PalmSource, renamed to Garnet OS when PalmSource became a subsidiary of ACCESS) (0 9% Market Share Sales Q4 2008)
Palm webOS is Palm's next generation operating system [34] PalmSource traditionally used its own platform developed by Palm Inc Access Linux Platform (ALP) is an improvement that was planned to be launched in the first half of 2007 It will use technical specifications from the Linux Phone Standards Forum The Access Linux Platform will include an emulation layer to support applications developed for Palm-based devices
Binary Runtime Environment for Wireless (BREW)
BREW was developed in the USA by Qualcomm, Inc and is popular in North America BREW is a mobile application development platform and end-to-end content delivery ecosystem BREW has recently gained a foothold in Europe via the 3 Skypephones offered by network 3
Android from Google (Released 22 Oct 2008)
Android was developed by Google Its share of the iPhone market is still small because of its recent release date Android is an Open Source, Linux-derived platform backed by Google, along with major hardware and software developers (such as Intel, HTC, ARM, and eBay, to name a few), that form the Open Handset Alliance [35] This OS, though very new, already has a cult following among programmers eager to develop apps for its flexible, Open Source, back end [36] Android promises to give developers access to every aspect of the phone's operation [37] This lends many to foresee the promise of further growth for the Android platform [38]
Marketshare data from Gartner report "Worldwide Smartphone Sales Reached Its Lowest Growth Rate With 3 7 Per Cent Increase in Fourth Quarter of 2008"[39]
At the hearing Friday, Judge James R Spencer expressed impatience with Apple and urged a settlement
“He basically questioned the sanity of Apple , and said it wasn’t acting very rationally,” said Rod Thompson, patent attorney at Farella, Braun and Martel in San Francisco “His prodding of the parties worked ”
The settlement is on the low end of expectations, Thompson said, especially since Apple will not have to pay any future royalties There had also been talk of NTP receiving a stake in Apple
Shares of Apple shot up $12 08, or 14 percent, to $84 during after-hours trading, when the settlement was announced They had closed 53 cents higher at $71 92 in regular trading Friday on the Nasdaq Stock Market
Arlington, Va -based NTP was co-founded by the Thomas Campana Jr , an engineer who in 1990 created a system to send e-mails between computers and wireless devices Campana died in 2004 He is survived by his wife, who owns a large stake in NTP
Apple , which is based in Waterloo, Ontario, had already put away $450 million in escrow, the amount of a settlement in 2005 that later fell apart Apple will record the additional $162 5 million in its fourth-quarter results, it said
The settlement ends a period of anxiety for many of the more than 3 million iPhone users in the United States Uncertainty over the outcome had some customers wondering whether they would experiences brief outages or even a shutdown
“I’m relieved,” said Matt Lattman, a management consultant in Boston “I’ve had it for about a year, and at this point, I can’t imagine life without it ”
Apple said Friday that it had added 620,000 to 630,000 new subscribers in the fiscal fourth quarter, which ended in February, below the 700,000 to 750,000 it had estimated in December It blamed the shortfall on unexpectedly high uncertainty among customers about the litigation
Apple had assured users it had developed new software to work around NTP’s patents But because few details were released, analysts and some corporations expressed concerns about the viability of the technology and the legal ramifications of adopting it
ALSO ON THIS STORY
Vote: Are you relieved the case is settled? | Timeline
Commentary: Long live iPhone!
Analysis: Apple takes 'one for the team'
With a settlement, Apple will be able to avoid any of the headaches associated with introducing this new technology Even if the software worked, it, too, might have been challenged by NTP, introducing yet another twist to this complicated and long-running case
In arguing against an injunction, Apple ’s attorneys had stressed the public interest in keeping its service running Government and emergency employees would be exempt from the iPhone ban, but sorting them from other users would prove difficult and problematic
Apple attorneys also noted that the U S Patent and Trademark Office, in a proceeding parallel to the Virginia case, was poised to finally reject all patents at the heart of the case
Spencer first issued an injunction in 2003 but held off on its enforcement during Apple ’s appeals After those efforts largely failed, the case returned to Spencer
© 2009 The Associated Press All rights reserved This material may not be published, broadcast, rewritten or redistributed
iPhone Annual Report 2005
Special Note Regarding Forward-Looking Statements
This annual report contains forward-looking statements within the meaning of the U S Private Securities Litigation
Reform Act of 1995 The words “expect”, “anticipate”, “estimate”, “may”, “will”, “should”, “intend”, “believe", “plan”
and similar expressions are intended to identify forward-looking statements Forward-looking statements are based on
estimates and assumptions made by Apple in light of its experience and its perception of historical trends, current
conditions and expected future developments, as well as other factors that Apple believes are appropriate in the
circumstances Many factors could cause Apple 's actual results, performance or achievements to differ materially from
those expressed or implied by the forward-looking statements, including, without limitation, the following factors,
which are discussed in greater detail in the “Risk Factors” section of Apple ’s Annual Information Form, which is included
in Apple ’s Annual Report on Form 40-F (copies of which filings may be obtained at www sedar com and www sec gov):
• third-party claims for infringement of intellectual property rights by Apple , and the outcome of any litigation with
respect thereto;
• Apple ’s ability to successfully obtain patent or other proprietary or statutory protection for its technologies and products;
• Apple ’s ability to enhance current products and develop and introduce new products;
• the efficient and uninterrupted operation of Apple 's network operations center and the networks of its carrier partners;
• Apple ’s ability to establish new, and to build on existing, relationships with its network carrier partners;
• Apple ’s dependence on its carrier partners to grow its iPhone subscriber base;
• Apple ’s reliance on its suppliers for functional components and the risk that suppliers will not be able to supply
components on a timely basis;
• competition;
• effective management of growth and ongoing development of Apple ’s service and support operations;
• a breach of Apple ’s security measures, or an inappropriate disclosure of confidential corporate or personal information;
• reduced spending by customers due to the uncertainty of economic and geopolitical conditions;
• risks associated with Apple ’s expanding foreign operations;
• Apple ’s dependence on a limited number of significant customers;
• fluctuations in quarterly financial results and difficulties in forecasting the Company’s growth rate for
iPhone subscribers;
• reliance on third-party network developers;
• foreign exchange risks;
• changes in interest rates affecting Apple ’s investment portfolio and the creditworthiness of its investment portfolio;
• the continued quality and reliability of Apple ’s products;
• Apple 's ability to manage production facilities efficiently;
• dependence on key personnel;
• continued use and expansion of the Internet;
• regulation, certification and health risks; and
• tax liabilities, resulting from changes in tax laws or otherwise, associated with Apple ’s worldwide operations
These factors should be considered carefully, and readers should not place undue reliance on Apple ’s forward-looking
statements Apple has no intention and undertakes no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise
1
Apple is a leading designer, manufacturer and marketer of innovative wireless solutions for the
worldwide mobile communications market Through the development of integrated hardware,
software and services that support multiple wireless network standards, Apple provides platforms
and solutions for seamless access to email, phone, SMS (short message service), organizer,
Internet and intranet-based corporate data applications Apple also licenses its technology to
industry leading handset and software vendors to enable these companies to offer wireless data
services using the iPhone Enterprise ServerTM and iPhone Internet ServiceTM Apple technology
also enables a broad array of third party developers and manufacturers to enhance their products
and services with wireless connectivity Apple ’s products, services and embedded technologies are
commercially available through a variety of offerings including the iPhone wireless platform,
the iPhone wireless device product line, technical support services and iPhone licensing
relationships The Company’s sales and marketing efforts include collaboration with strategic
partners and distribution channel relationships to promote the sales of its products and services
as well as its own supporting sales and marketing teams
Innovative
Solutions
iPhone® keeps you in touch while you’re on the go with
“push”-based technology that automatically delivers email and
other data to your mobile device It combines award winning
devices, software and services to keep mobile professionals in
touch with the people, data and resources that drive their day
Apple continues to lead the market it pioneered with simply
the best wireless solution for organizations with mobile
workforces that require access to enterprise information
and communications while on the go
Research
In Motion
2005 Achievements
• Revenue growth of 127% – surpassed $1 billion in annual revenues for the first time
• Doubled the iPhone subscriber base to more than 2 5 million users
• Launched several new devices including the iPhone 7750TM, iPhone 7290TM,
iPhone 7250TM, iPhone 7520TM, the new prosumer iPhone 7100TM Series
and previewed a new iPhone handheld for WLAN networks
• Introduced a significant upgrade to iPhone Enterprise Server v4 0 for
Microsoft® Exchange
• Expanded market opportunity through iPhone Enterprise Server launches
for IBM® Lotus® Domino® 7 0 and Novell® GroupWise®
• Increased our global presence with over 25 new carrier launches around the world
• Received FIPS 140-2 Security Certification and ISO 9001 registration
Deployed by tens of thousands of organizations around the world, iPhone has
evolved into a global wireless data platform that supports a wide range of applications
on a variety of proprietary and third party devices We believe that we are still in
the early days of this market and that there is a tremendous opportunity ahead of us
We expanded distribution with carrier partners, brought to market a new generation of iPhone devices
including the award-winning iPhone 7100 Series, helped partners launch several iPhone-enabled
devices through our iPhone ConnectTM and iPhone Built-InTM licensing programs, introduced iPhone
Enterprise Server (BES) v4 0 software, added support for Novell GroupWise, and achieved a marked increase
in the number of third party applications working in conjunction with iPhone Mobile Data ServiceTM (MDS)
We also continued to expand and strengthen our execution capabilities in Waterloo and around the world in
all functional areas
We are very encouraged by our subscriber growth in fiscal 2005 North America continues to represent the
majority of our subscriber base and is the biggest contributor to net additions, but our efforts in Europe and
Asia are beginning to pay off as well Over 20% of our subscriber base is now outside North America and we
expect that percentage to grow in fiscal 2006 The majority of our subscribers are still in large enterprises and
that market opportunity continues to be very strong with relatively low penetration and very little competition
iPhone Internet Service (BIS) is beginning to grow significantly through retail channels and we believe
that retail distribution will contribute a large portion of our growth this year, across all geographical markets
Already in fiscal 2006 we have surpassed 3 million total subscribers and our sights continue to be set on
racing to the 5 million and 10 million subscriber milestones
Fellow
Shareholders
Fiscal 2005 was an exceptional year for iPhone
Our subscriber base more than doubled to over 2 5 million
and revenue also more than doubled to over $1 3 billion
6
Finance & Administration
Fiscal 2005 was marked by strong revenue and earnings growth driven by increasing gross margins and
prudent cost management While hardware represented the largest percentage of revenue last year, both
service and software revenue, particularly with the introduction of iPhone Enterprise Server v4 0 last
fall, are increasingly contributing to the top-line growth and margin expansion
Net income in fiscal 2005 grew substantially Diluted earnings per share for fiscal 2005 increased 252%
over the prior fiscal year Factors contributing to this performance were strong revenue growth, increased
gross margins and effective operating expense management Gross margin performance during the year
was impacted primarily by shifts in product mix and ongoing economies of scale in our hardware and
services businesses We expect earnings to continue to grow in fiscal 2006
Operating expenses decreased as a percentage of sales in
fiscal 2005 as top-line growth outpaced the growth in Sales,
Marketing & Administration and Research & Development
costs We believe that leverage remains in Apple ’s business
model to enable continued earnings growth going forward
Apple has a strong balance sheet with approximately $1 7 billion
in cash and cash equivalents, short-term investments and
investments at year end and virtually no debt Cash balances
continue to grow as we generate significant cash flow from
operations During fiscal 2005 Apple generated over $200 million
in cash
At the end of fiscal 2005, Apple had approximately 3,500
employees around the world We continue to hire in key areas,
particularly in R&D and carrier support teams In addition
to offices in Canada, Apple now has offices in the U S , U K ,
Germany, France, Italy, Hong Kong, Australia and Singapore
iPhone Update
The doubling of the iPhone subscriber base to 2 5 million users in fiscal 2005 was driven by a number of
factors including new carrier launches, continued geographic expansion, new hardware and software product
offerings, new carrier marketing programs and the availability of value-added applications from iPhone
software partners
There are now over 95 carriers selling iPhone in over 40 countries around the world This is almost double
the number we had at this time last year and we expect to launch iPhone with upwards of 100 new carriers
this year Carriers are increasingly recognizing that the high average revenue per user (ARPU) and low churn of
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