Failure to obtain or create digital content that appeals to the Company’s customers, or to make such content available on commercially reasonable terms, could have a material adverse impact on the Company’s business, results of operations and financial condition. The Company contracts with numerous third parties to offer their digital content to customers. This includes the right to sell, or
offer subscriptions to, third-party content, as well as the right to incorporate specific content into the Company’s own services.
The licensing or other distribution arrangements for this content can be for relatively short time periods and do not guarantee the
continuation or renewal of these arrangements on commercially reasonable terms, or at all. Some third-party content providers
and distributors currently or in the future may offer competing products and services, and can take actions to make it difficult or
impossible for the Company to license or otherwise distribute their content. Other content owners, providers or distributors may
seek to limit the Company’s access to, or increase the cost of, such content. The Company may be unable to continue to offer a
wide variety of content at commercially reasonable prices with acceptable usage rules.
The Company also produces its own digital content, which can be costly to produce due to intense and increasing competition for
talent, content and subscribers, and may fail to appeal to the Company’s customers. The COVID-19 pandemic has also caused
additional restrictions on production and increased costs for digital content.
Some third-party digital content providers require the Company to provide digital rights management and other security solutions.
If requirements change, the Company may have to develop or license new technology to provide these solutions. There can be
no assurance the Company will be able to develop or license such solutions at a reasonable cost and in a timely manner.
Apple Inc. | 2022 Form 10-K | 10
