United states securities and exchange commission

Markets and Distribution
The Company’s customers are primarily in the consumer, small and mid-sized business, education, enterprise and government 
markets. The Company sells its products and resells third-party products in most of its major markets directly to consumers, 
small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its 
direct sales force. The Company also employs a variety of indirect distribution channels, such as third-party cellular network 
carriers, wholesalers, retailers and resellers. During 2022, the Company’s net sales through its direct and indirect distribution 
channels accounted for 38% and 62%, respectively, of total net sales.
Competition
The markets for the Company’s products and services are highly competitive, and are characterized by aggressive price 
competition and resulting downward pressure on gross margins, frequent introduction of new products and services, short 
product life cycles, evolving industry standards, continual improvement in product price and performance characteristics, rapid 
adoption of technological advancements by competitors, and price sensitivity on the part of consumers and businesses. Many of 
the Company’s competitors seek to compete primarily through aggressive pricing and very low cost structures, and by imitating 
the Company’s products and infringing on its intellectual property.
The Company’s ability to compete successfully depends heavily on ensuring the continuing and timely introduction of innovative 
new products, services and technologies to the marketplace. The Company designs and develops nearly the entire solution for 
its products, including the hardware, operating system, numerous software applications and related services. Principal 
competitive factors important to the Company include price, product and service features (including security features), relative 
price and performance, product and service quality and reliability, design innovation, a strong third-party software and 
accessories ecosystem, marketing and distribution capability, service and support, and corporate reputation.
Apple Inc. | 2022 Form 10-K | 2

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The Company is focused on expanding its market opportunities related to smartphones, personal computers, tablets, wearables 
and accessories, and services. The Company faces substantial competition in these markets from companies that have 
significant technical, marketing, distribution and other resources, as well as established hardware, software, and service offerings 
with large customer bases. In addition, some of the Company’s competitors have broader product lines, lower-priced products 
and a larger installed base of active devices. Competition has been particularly intense as competitors have aggressively cut 
prices and lowered product margins. Certain competitors have the resources, experience or cost structures to provide products 
at little or no profit or even at a loss. The Company’s services compete with business models that provide content to users for 
free and use illegitimate means to obtain third-party digital content and applications. The Company faces significant competition 
as competitors imitate the Company’s product features and applications within their products, or collaborate to offer integrated 
solutions that are more competitive than those they currently offer.