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[INST]The Company designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services.What types of products does the Company design, manufacture, and market?[/INST]The Company designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. </s>

[INST]The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September.When does the Company's fiscal year end?[/INST]The Company's fiscal year ends on the last Saturday of September. </s>

[INST]iPhone® is the Company’s line of smartphones based on its iOS operating system. The iPhone line includes iPhone 15 Pro, iPhone 15, iPhone 14, iPhone 13 and iPhone SE®.What operating system is used for the Company's iPhone line?[/INST]The Company's iPhone line uses the iOS operating system. </s>

[INST]Mac® is the Company’s line of personal computers based on its macOS® operating system. The Mac line includes laptops MacBook Air® and MacBook Pro®, as well as desktops iMac®, Mac mini®, Mac Studio® and Mac Pro®.Name the two laptop models included in the Company's Mac line.[/INST]The two laptop models included in the Company's Mac line are MacBook Air and MacBook Pro. </s>

[INST]Wearables includes smartwatches and wireless headphones. The Company’s line of smartwatches, based on its watchOS® operating system, includes Apple Watch Ultra™ 2, Apple Watch® Series 9 and Apple Watch SE®.What wearable products and related operating system does the Company offer?[/INST]The Company offers Apple Watch Ultra 2, Apple Watch Series 9, and Apple Watch SE based on its watchOS operating system. </s>

[INST]Home includes Apple TV®, the Company’s media streaming and gaming device based on its tvOS® operating system, and HomePod® and HomePod mini®, high-fidelity wireless smart speakers.What are the home products mentioned in the text?[/INST]The home products mentioned are Apple TV, HomePod, and HomePod mini. </s>

[INST]The Company offers a portfolio of fee-based service and support products under the AppleCare® brand. The offerings provide priority access to Apple technical support, access to the global Apple authorized service network for repair and replacement services, and in many cases additional coverage for instances of accidental damage or theft and loss, depending on the country and type of product.What kind of products are offered under the AppleCare brand?[/INST]AppleCare offers fee-based service and support products including priority access to technical support, repair and replacement services, and additional coverage for accidental damage or theft and loss, depending on the country and product type. </s>

[INST]Segments The Company manages its business primarily on a geographic basis. The Company’s reportable segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific.What segments does the Company manage its business on?[/INST]The Company manages its business primarily on a geographic basis, with reportable segments consisting of the Americas, Europe, Greater China, Japan, and Rest of Asia Pacific. </s>

[INST]During 2023, the Company’s net sales through its direct and indirect distribution channels accounted for 37% and 63%, respectively, of total net sales.During 2023, what percentage of the Company’s net sales came from direct sales channels?[/INST]During 2023, 37% of the Company's net sales came from direct sales channels. </s>

[INST]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.What factors characterize the competition for the Company’s products and services?[/INST]The competition for the Company’s products and services is characterized by aggressive price competition, frequent introduction of new products and services, short product life cycles, evolving industry standards, continual improvement in product price and performance, rapid adoption of technological advancements by competitors, and price sensitivity of consumers and businesses. </s>

[INST]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.What are the key factors contributing to Apple's success in competition?[/INST]Key factors contributing to Apple's success 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. </s>

[INST]Supply of Components Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from single or limited sources.From which sources does Apple obtain certain essential components?[/INST]Apple obtains certain essential components from single or limited sources. </s>

[INST]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.How do competitors of Apple primarily compete in the market?[/INST]Competitors primarily compete through aggressive pricing and very low cost structures, by imitating Apple's products and infringing on its intellectual property. </s>

[INST]The Company is focused on expanding its market opportunities related to smartphones, personal computers, tablets, wearables and accessories, and services.In which product categories is Apple focused on expanding its market opportunities?[/INST]Apple is focused on expanding its market opportunities related to smartphones, personal computers, tablets, wearables and accessories, and services. </s>

[INST]Research and Development Because the industries in which the Company competes are characterized by rapid technological advances, the Company’s ability to compete successfully depends heavily upon its ability to ensure a continual and timely flow of competitive products, services and technologies to the marketplace.What must Apple ensure to compete successfully given the rapid technological advances in its industry?[/INST]Apple must ensure a continual and timely flow of competitive products, services, and technologies to the marketplace. </s>

[INST]The Company currently holds a broad collection of intellectual property rights relating to certain aspects of its hardware devices, accessories, software and services. This includes patents, designs, copyrights, trademarks and other forms of intellectual property rights in the U.S. and various foreign countries. Although the Company believes the ownership of such intellectual property rights is an important factor in differentiating its business and that its success does depend in part on such ownership, the Company relies primarily on the innovative skills, technical competence and marketing abilities of its personnel.Why is ownership of intellectual property important for Apple?[/INST]Ownership of intellectual property is important for Apple as it differentiates its business and contributes to its success. </s>

[INST]Supply of Components Although most components essential to the Company’s business are generally available from multiple sources, certain components are currently obtained from single or limited sources. The Company also competes for various components with other participants in the markets for smartphones, personal computers, tablets, wearables and accessories. Therefore, many components used by the Company, including those that are available from multiple sources, are at times subject to industry-wide shortage and significant commodity pricing fluctuations. The Company uses some custom components that are not commonly used by its competitors, and new products introduced by the Company often utilize custom components available from only one source. When a component or product uses new technologies, initial capacity constraints may exist until the suppliers’ yields have matured or their manufacturing capacities have increased.What challenges does Apple face regarding the availability of components?[/INST]Apple faces challenges such as industry-wide shortages, significant commodity pricing fluctuations, and initial capacity constraints for components using new technologies. </s>

[INST]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.What reasons do some competitors have for potentially providing products at little or no profit?[/INST]Certain competitors have the resources, experience, or cost structures to provide products at little or no profit, or even at a loss. </s>

[INST]The Company regularly files patent, design, copyright and trademark applications to protect innovations arising from its research, development, design and marketing, and is currently pursuing thousands of applications around the world.What actions does Apple regularly undertake to protect innovations arising from its research, development, design, and marketing?[/INST]Apple regularly files patent, design, copyright, and trademark applications to protect innovations arising from its research, development, design, and marketing. </s>

[INST]The Company continues to develop new technologies to enhance existing products and services, and to expand the range of its offerings through research and development (“R&D”), licensing of intellectual property and acquisition of third-party businesses and technology.How does Apple expand the range of its offerings?[/INST]Apple expands the range of its offerings through research and development, licensing of intellectual property, and acquisition of third-party businesses and technology. </s>

[INST]The Company has historically experienced higher net sales in its first quarter compared to other quarters in its fiscal year due in part to seasonal holiday demand.What has historically caused Apple to experience higher net sales in its first quarter compared to other quarters?[/INST]Seasonal holiday demand has historically caused Apple to experience higher net sales in its first quarter compared to other quarters. </s>

[INST]Additionally, new product and service introductions can significantly impact net sales, cost of sales and operating expenses. The timing of product introductions can also impact the Company’s net sales to its indirect distribution channels as these channels are filled with new inventory following a product launch, and channel inventory of an older product often declines as the launch of a newer product approaches.How does the timing of new product introductions impact Apple's net sales and operating expenses?[/INST]The timing of new product introductions can significantly impact Apple's net sales, cost of sales, and operating expenses. </s>

[INST]It may be necessary in the future to seek or renew licenses relating to various aspects of the Company’s products, processes and services. While the Company has generally been able to obtain such licenses on commercially reasonable terms in the past, there is no guarantee that such licenses could be obtained in the future on reasonable terms or at all.What is Apple's approach to licenses for intellectual property owned by third parties used in its products and services?[/INST]Apple may need to seek or renew licenses relating to various aspects of its products, processes, and services, though there is no guarantee these licenses can be obtained on reasonable terms in the future. </s>

[INST]As of September 30, 2023, the Company had approximately 161,000 full-time equivalent employees.What is the headcount of Apple's full-time equivalent employees as of September 30, 2023?[/INST]As of September 30, 2023, Apple had approximately 161,000 full-time equivalent employees. </s>

[INST]The Company is an equal opportunity employer committed to inclusion and diversity and to providing a workplace free of harassment or discrimination.What is Apple's commitment to workplace practices and policies concerning harassment or discrimination?[/INST]Apple is committed to providing a workplace free of harassment or discrimination and is an equal opportunity employer. </s>

[INST]The Company believes that compensation should be competitive and equitable, and should enable employees to share in the Company’s success. The Company recognizes its people are most likely to thrive when they have the resources to meet their needs and the time and support to succeed in their professional and personal lives. In support of this, the Company offers a wide variety of benefits for employees around the world and invests in tools and resources that are designed to support employees’ individual growth and development.What does Apple believe contributes significantly to employee thriving in professional and personal lives?[/INST]Apple believes that providing competitive and equitable compensation, as well as a wide variety of benefits and support, contributes significantly to employees thriving in their professional and personal lives. </s>

[INST]The Company is committed to its vision to build and sustain a more inclusive workforce that is representative of the communities it serves. The Company continues to work to increase diverse representation at every level, foster an inclusive culture, and support equitable pay and access to opportunity for all employees.What is Apple's vision regarding inclusion and diversity within its workforce?[/INST]Apple's vision is to build and sustain a more inclusive workforce that is representative of the communities it serves and to increase diverse representation at every level. </s>

[INST]The Company believes that open and honest communication among team members, managers and leaders helps create an open, collaborative work environment where everyone can contribute, grow and succeed. Team members are encouraged to come to their managers with questions, feedback or concerns, and the Company conducts surveys that gauge employee sentiment in areas like career development, manager performance and inclusivity.How does Apple encourage communication among team members, managers, and leaders?[/INST]Apple encourages open and honest communication among team members, managers, and leaders by promoting an environment where everyone can contribute, grow, and succeed. </s>

[INST]The Company is committed to protecting its team members everywhere it operates. The Company identifies potential workplace risks in order to develop measures to mitigate possible hazards. The Company supports employees with general safety, security and crisis management training, and by putting specific programs in place for those working in potentially high-hazard environments.What safety measures does Apple implement to protect its team members in the workplace?[/INST]Apple identifies potential workplace risks and develops measures to mitigate possible hazards, supports employees with general safety, security, and crisis management training, and has specific programs for high-hazard environments. </s>

[INST]The Company periodically provides certain information for investors on its corporate website, www.apple.com, and its investor relations website, investor.apple.com. This includes press releases and other information about financial performance, information on environmental, social and governance matters, and details related to the Company’s annual meeting of shareholders.Where can information about Apple’s financial performance and annual meeting of shareholders be accessed?[/INST]Information about Apple's financial performance and annual meeting of shareholders can be accessed at the company's corporate website and its investor relations website. </s>

[INST]Epic Games Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “District Court”) against the Company alleging violations of federal and state antitrust laws and California’s unfair competition law based upon the Company’s operation of its App Store.Which company filed a lawsuit against Apple alleging violations of federal and state antitrust laws and California's unfair competition law?[/INST]Epic Games, Inc. filed the lawsuit against Apple. </s>

[INST]Epic Games Epic Games, Inc. (“Epic”) filed a lawsuit in the U.S. District Court for the Northern District of California (the “District Court”) against the Company alleging violations of federal and state antitrust laws and California’s unfair competition law based upon the Company’s operation of its App Store. On September 10, 2021, the District Court ruled in favor of the Company with respect to nine out of the ten counts included in Epic’s claim.What did the District Court rule on September 10, 2021, regarding the lawsuit filed by Epic Games?[/INST]The District Court ruled in favor of Apple with respect to nine out of the ten counts included in Epic’s claim. </s>

[INST]The District Court found that certain provisions of the Company’s App Store Review Guidelines violate California’s unfair competition law and issued an injunction enjoining the Company from prohibiting developers from including in their apps external links that direct customers to purchasing mechanisms other than Apple in-app purchasing.What did the District Court issue against Apple regarding its App Store Review Guidelines?[/INST]The District Court issued an injunction enjoining Apple from prohibiting developers from including external links in their apps that direct customers to purchasing mechanisms other than Apple in-app purchasing. </s>

[INST]On April 24, 2023, the U.S. Court of Appeals for the Ninth Circuit (the “Circuit Court”) affirmed the District Court’s ruling.When did the U.S. Court of Appeals for the Ninth Circuit affirm the District Court's ruling?[/INST]The U.S. Court of Appeals for the Ninth Circuit affirmed the District Court’s ruling on April 24, 2023. </s>

[INST]On June 7, 2023, the Company and Epic filed petitions with the Circuit Court requesting further review of the decision. On June 30, 2023, the Circuit Court denied both petitions.When did the Circuit Court deny the petitions filed by Apple and Epic for further review of the decision?[/INST]The Circuit Court denied both petitions on June 30, 2023. </s>

[INST]On July 17, 2023, the Circuit Court granted Apple’s motion to stay enforcement of the injunction pending appeal to the U.S. Supreme Court.What action did the Circuit Court take on July 17, 2023, regarding Apple's motion?[/INST]The Circuit Court granted Apple’s motion to stay enforcement of the injunction pending appeal to the U.S. Supreme Court. </s>

[INST]Masimo Masimo Corporation and Cercacor Laboratories, Inc. (together, “Masimo”) filed a complaint before the U.S. International Trade Commission (the “ITC”) alleging infringement by the Company of five patents relating to the functionality of the blood oxygen feature in Apple Watch Series 6 and 7.What did Masimo allege in its complaint before the U.S. International Trade Commission?[/INST]Masimo alleged that Apple infringed on five patents related to the functionality of the blood oxygen feature in Apple Watch Series 6 and 7. </s>

[INST]In its complaint, Masimo sought a permanent exclusion order prohibiting importation to the United States of certain Apple Watch models that include blood oxygen sensing functionality.What did Masimo seek in its complaint regarding Apple Watch models?[/INST]Masimo sought a permanent exclusion order prohibiting importation to the United States of certain Apple Watch models that include blood oxygen sensing functionality. </s>

[INST]On October 26, 2023, the ITC entered a limited exclusion order (the “Order”) prohibiting importation and sales in the United States of Apple Watch models with blood oxygen sensing functionality, which includes Apple Watch Series 9 and Ultra 2.What did the ITC do on October 26, 2023, related to Apple Watch models with blood oxygen sensing functionality?[/INST]The ITC entered a limited exclusion order prohibiting importation and sales in the United States of Apple Watch models with blood oxygen sensing functionality, which includes Apple Watch Series 9 and Ultra 2. </s>

[INST]The Order will not go into effect until the end of the administrative review period, which is currently expected to end on December 25, 2023. The Company intends to appeal the Order and seek a stay pending the appeal.What is the Company’s plan following the ITC's order regarding Apple Watch models?[/INST]The Company intends to appeal the ITC Order and seek a stay pending the appeal. </s>

[INST]Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This Item generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended September 24, 2022.Which consolidated financial statements should be read in conjunction with the discussion in Item 7?[/INST]The consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. </s>

[INST]Fiscal Period The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters, which occurred in the first quarter of 2023. The Company’s fiscal year 2023 spanned 53 weeks, whereas fiscal years 2022 and 2021 spanned 52 weeks each.When does the Company's fiscal year end?[/INST]The last Saturday of September. </s>

[INST]Fiscal Year Highlights The Company’s total net sales were $383.3 billion and net income was $97.0 billion during 2023. The Company’s total net sales decreased 3% or $11.0 billion during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar accounted for more than the entire year-over-year decrease in total net sales, which consisted primarily of lower net sales of Mac and iPhone, partially offset by higher net sales of Services.What were the Company's total net sales and net income during 2023?[/INST]The Company's total net sales were $383.3 billion and net income was $97.0 billion during 2023. </s>

[INST]The Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2023 included the following: First Quarter 2023: •iPad and iPad Pro; •Next-generation Apple TV 4K; and •MLS Season Pass, a Major League Soccer subscription streaming service.What were some significant announcements made by the Company in the first quarter of 2023?[/INST]Significant announcements in the first quarter of 2023 included iPad and iPad Pro, Next-generation Apple TV 4K, and MLS Season Pass, a Major League Soccer subscription streaming service. </s>

[INST]The Company announces new product, service and software offerings at various times during the year. Significant announcements during fiscal year 2023 included the following: Third Quarter 2023: •MacBook Air 15”, Mac Studio and Mac Pro; •Apple Vision Pro™, the Company’s first spatial computer featuring its new visionOS™, expected to be available in early calendar year 2024; and •iOS 17, macOS Sonoma, iPadOS 17, tvOS 17 and watchOS 10, updates to the Company’s operating systems.Which operating systems received updates in the third quarter of 2023?[/INST]In the third quarter of 2023, updates were made to iOS 17, macOS Sonoma, iPadOS 17, tvOS 17, and watchOS 10. </s>

[INST]In May 2023, the Company announced a new share repurchase program of up to $90 billion and raised its quarterly dividend from $0.23 to $0.24 per share beginning in May 2023. During 2023, the Company repurchased $76.6 billion of its common stock and paid dividends and dividend equivalents of $15.0 billion.When did the Company announce a new share repurchase program and raise its quarterly dividend?[/INST]In May 2023, the Company announced a new share repurchase program of up to $90 billion and raised its quarterly dividend from $0.23 to $0.24 per share. </s>

[INST]Macroeconomic Conditions Macroeconomic conditions, including inflation, changes in interest rates, and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company’s results of operations and financial condition.How might macroeconomic conditions impact the Company's results of operations and financial condition?[/INST]Macroeconomic conditions, including inflation, changes in interest rates, and currency fluctuations, have directly and indirectly impacted, and could in the future materially impact, the Company’s results of operations and financial condition. </s>

[INST]Americas Americas net sales decreased 4% or $7.1 billion during 2023 compared to 2022 due to lower net sales of iPhone and Mac, partially offset by higher net sales of Services.What was the percentage change in Americas net sales during 2023 compared to 2022?[/INST]Americas net sales decreased 4% during 2023 compared to 2022. </s>

[INST]Segment Operating Performance The following table shows net sales by reportable segment for 2023, 2022 and 2021 (dollars in millions): Rest of Asia Pacific | 29,615 | | | 1 | % | | 29,375 | | | 11 | % | | 26,356 Total net sales | $ | 383,285 | | | (3) | % | | $ | 394,328 | | | 8 | % | $ | 365,817Which reportable segment experienced a net sales increase in 2023 and by what percentage did this increase?[/INST]The Rest of Asia Pacific segment experienced a net sales increase of 1% in 2023. </s>

[INST]In May 2023, the Company announced a new share repurchase program of up to $90 billion and raised its quarterly dividend from $0.23 to $0.24 per share beginning in May 2023. During 2023, the Company repurchased $76.6 billion of its common stock and paid dividends and dividend equivalents of $15.0 billion.How much did the Company repurchase of its common stock during 2023?[/INST]The Company repurchased $76.6 billion of its common stock during 2023. </s>

[INST]Americas net sales decreased 4% or $7.1 billion during 2023 compared to 2022 due to lower net sales of iPhone and Mac, partially offset by higher net sales of Services.By how much did Americas net sales decrease in 2023 compared to 2022?[/INST]$7.1 billion </s>

[INST]Europe net sales decreased 1% or $824 million during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar accounted for more than the entire year-over-year decrease in Europe net sales, which consisted primarily of lower net sales of Mac and Wearables, Home and Accessories, partially offset by higher net sales of iPhone and Services.What primarily caused the year-over-year decrease in Europe net sales in 2023?[/INST]The weakness in foreign currencies relative to the U.S. dollar </s>

[INST]Greater China net sales decreased 2% or $1.6 billion during 2023 compared to 2022. The weakness in the renminbi relative to the U.S. dollar accounted for more than the entire year-over-year decrease in Greater China net sales, which consisted primarily of lower net sales of Mac and iPhone.Which categories primarily saw lower net sales in Greater China in 2023?[/INST]Mac and iPhone </s>

[INST]Japan net sales decreased 7% or $1.7 billion during 2023 compared to 2022. The weakness in the yen relative to the U.S. dollar accounted for more than the entire year-over-year decrease in Japan net sales, which consisted primarily of lower net sales of iPhone, Wearables, Home and Accessories and Mac.How much did Japan net sales decrease in 2023 compared to 2022?[/INST]$1.7 billion </s>

[INST]Rest of Asia Pacific net sales increased 1% or $240 million during 2023 compared to 2022. The weakness in foreign currencies relative to the U.S. dollar had a significantly unfavorable year-over-year impact on Rest of Asia Pacific net sales. The net sales increase consisted of higher net sales of iPhone and Services, partially offset by lower net sales of Mac and iPad.How did Rest of Asia Pacific net sales change in 2023 compared to 2022?[/INST]They increased by 1% or $240 million </s>

[INST]Mac net sales decreased 27% or $10.8 billion during 2023 compared to 2022 due primarily to lower net sales of laptops.Which product category had the greatest percentage decrease in net sales in 2023 compared to 2022?[/INST]Mac </s>

[INST]iPhone net sales decreased 2% or $4.9 billion during 2023 compared to 2022 due to lower net sales of non-Pro iPhone models, partially offset by higher net sales of Pro iPhone models.Why did iPhone net sales decrease in 2023 compared to 2022?[/INST]Due to lower net sales of non-Pro iPhone models, partially offset by higher net sales of Pro iPhone models </s>

[INST]Wearables, Home and Accessories net sales decreased 3% or $1.4 billion during 2023 compared to 2022 due primarily to lower net sales of Wearables and Accessories.Which product categories saw a net sales decrease in the category of Wearables, Home, and Accessories in 2023 compared to 2022?[/INST]Wearables and Accessories </s>

[INST]Services net sales increased 9% or $7.1 billion during 2023 compared to 2022 due to higher net sales across all lines of business.What was the percentage increase in Services net sales from 2022 to 2023?[/INST]9% </s>

[INST]Total gross margin for 2023: $169,148 million, for 2022: $170,782 million, and for 2021: $152,836 million.How did the total gross margin for Apple Inc. change from 2022 to 2023?[/INST]It decreased from $170,782 million in 2022 to $169,148 million in 2023. </s>

[INST]2023 | | 2022 | | 2021 Gross margin: | | | | | Products | $ | 108,803 | | | $ | 114,728 | | $ | 105,126 Services | 60,345 | | | 56,054 | | | 47,710 Total gross margin | $ | 169,148 | | | $ | 170,782 | | $ | 152,836What was the gross margin for products in 2023?[/INST]$108,803 million </s>

[INST]Gross margin percentage: | | | | Products | 36.5 | % | 36.3 | % | 35.3 | % Services | 70.8 | % | 71.7 | % | 69.7 | % Total gross margin percentage | 44.1 | % | 43.3 | % | 41.8 | % Products Gross Margin Products gross margin decreased during 2023 compared to 2022 due to the weakness in foreign currencies relative to the U.S. dollar and lower Products volume, partially offset by cost savings and a different Products mix. Products gross margin percentage increased during 2023 compared to 2022 due to cost savings and a different Products mix, partially offset by the weakness in foreign currencies relative to the U.S. dollar and decreased leverage.How did the products gross margin percentage change from 2022 to 2023?[/INST]It increased from 36.3% in 2022 to 36.5% in 2023. </s>

[INST]Services Gross Margin Services gross margin increased during 2023 compared to 2022 due primarily to higher Services net sales, partially offset by the weakness in foreign currencies relative to the U.S. dollar and higher Services costs.What were the main reasons for the increase in services gross margin in 2023 compared to 2022?[/INST]Higher Services net sales, partially offset by the weakness in foreign currencies relative to the U.S. dollar and higher Services costs. </s>

[INST]Operating Expenses Operating expenses for 2023, 2022 and 2021 were as follows (dollars in millions): | 2023 | | Change | 2022 | | Change | | 2021 Research and development | $ | 29,915 | | 14 | % | | $ | 26,251 | | 20 | % | $ | 21,914 Percentage of total net sales | 8 | % | | | 7 | % | | | 6 | % Selling, general and administrative | $ | 24,932 | | (1) | % | | $ | 25,094 | | 14 | % | $ | 21,973 Percentage of total net sales | 7 | % | | | 6 | % | | | 6 | % Total operating expenses | $ | 54,847 | | 7 | % | | $ | 51,345 | | 17 | % | $ | 43,887 Percentage of total net sales | 14 | % | | | 13 | % | | | 12 | %How much did the company spend on research and development in 2022?[/INST]$26,251 million </s>

[INST]Provision for Income Taxes Provision for income taxes, effective tax rate and statutory federal income tax rate for 2023, 2022 and 2021 were as follows (dollars in millions): | 2023 | | 2022 | | 2021 Provision for income taxes | $ | 16,741 | | | $ | 19,300 | | | $ | 14,527 Effective tax rate | 14.7 | % | | 16.2 | % | | 13.3 | % Statutory federal income tax rate | 21 | % | | 21 | % | | 21 | % The Company’s effective tax rate for 2023 and 2022 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes.What was the effective tax rate for the company in 2023?[/INST]14.7% </s>

[INST]Operating Expenses Operating expenses for 2023, 2022 and 2021 were as follows (dollars in millions): | 2023 | | Change | 2022 | | Change | | 2021 Research and development | $ | 29,915 | | 14 | % | | $ | 26,251 | | 20 | % | $ | 21,914 Percentage of total net sales | 8 | % | | | 7 | % | | | 6 | % Selling, general and administrative | $ | 24,932 | | (1) | % | | $ | 25,094 | | 14 | % | $ | 21,973 Percentage of total net sales | 7 | % | | | 6 | % | | | 6 | % Total operating expenses | $ | 54,847 | | 7 | % | | $ | 51,345 | | 17 | % | $ | 43,887 Percentage of total net sales | 14 | % | | | 13 | % | | | 12 | %What were the total operating expenses for the company in 2021?[/INST]$43,887 million </s>

[INST]The Company’s effective tax rate for 2023 and 2022 was lower than the statutory federal income tax rate due primarily to a lower effective tax rate on foreign earnings, the impact of the U.S. federal R&D credit, and tax benefits from share-based compensation, partially offset by state income taxes. The Company’s effective tax rate for 2023 was lower compared to 2022 due primarily to a lower effective tax rate on foreign earnings and the impact of U.S. foreign tax credit regulations issued by the U.S. Department of the Treasury in 2022, partially offset by lower tax benefits from share-based compensation.Why did the company's effective tax rate decrease from 2022 to 2023?[/INST]Due primarily to a lower effective tax rate on foreign earnings and the impact of U.S. foreign tax credit regulations issued by the U.S. Department of the Treasury in 2022, partially offset by lower tax benefits from share-based compensation. </s>

[INST]Provision for Income Taxes Provision for income taxes, effective tax rate and statutory federal income tax rate for 2023, 2022 and 2021 were as follows (dollars in millions): | 2023 | | 2022 | | 2021 Provision for income taxes | $ | 16,741 | | | $ | 19,300 | | | $ | 14,527 Effective tax rate | 14.7 | % | | 16.2 | % | | 13.3 | % Statutory federal income tax rate | 21 | % | | 21 | % | | 21 | %What was the total provision for income taxes in 2021?[/INST]$14,527 million </s>

[INST]The Company’s future gross margins can be impacted by a variety of factors, as discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” As a result, the Company believes, in general, gross margins will be subject to volatility and downward pressure.What factors could impact the company's future gross margins?[/INST]A variety of factors, as discussed in Part I, Item 1A of this Form 10-K under the heading “Risk Factors.” </s>

[INST]The Company believes its balances of cash, cash equivalents and unrestricted marketable securities, which totaled $148.3 billion as of September 30, 2023, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.How much cash, cash equivalents, and unrestricted marketable securities did the company have as of September 30, 2023?[/INST]$148.3 billion </s>

[INST]Research and Development The year-over-year growth in R&D expense in 2023 was driven primarily by increases in headcount-related expenses.What were the main reasons for the year-over-year growth in R&D expense in 2023?[/INST]Increases in headcount-related expenses. </s>

[INST]equivalents and unrestricted marketable securities, which totaled $148.3 billion as of September 30, 2023, along with cash generated by ongoing operations and continued access to debt markets, will be sufficient to satisfy its cash requirements and capital return program over the next 12 months and beyond.What was the total amount of cash equivalents and unrestricted marketable securities as of September 30, 2023?[/INST]$148.3 billion </s>

[INST]As of September 30, 2023, the Company had outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $106.6 billion (collectively the “Notes”), with $9.9 billion payable within 12 months.How much of the Company's fixed-rate notes' principal amount was payable within 12 months as of September 30, 2023?[/INST]$9.9 billion </s>

[INST]Future interest payments associated with the Notes total $41.1 billion, with $2.9 billion payable within 12 months.What was the total amount of future interest payments associated with the Notes as of September 30, 2023?[/INST]$41.1 billion </s>

[INST]The Company also issues unsecured short-term promissory notes pursuant to a commercial paper program. As of September 30, 2023, the Company had $6.0 billion of commercial paper outstanding, all of which was payable within 12 months.What amount of commercial paper was outstanding as of September 30, 2023?[/INST]$6.0 billion </s>

[INST]As of September 30, 2023, the Company had fixed lease payment obligations of $15.8 billion, with $2.0 billion payable within 12 months.What was the total amount of the Company's fixed lease payment obligations as of September 30, 2023?[/INST]$15.8 billion </s>

[INST]As of September 30, 2023, the Company had manufacturing purchase obligations of $53.1 billion, with $52.9 billion payable within 12 months.How much of the Company's manufacturing purchase obligations were payable within 12 months as of September 30, 2023?[/INST]$52.9 billion </s>

[INST]As of September 30, 2023, the balance of the deemed repatriation tax payable imposed by the U.S. Tax Cuts and Jobs Act of 2017 (the “Act”) was $22.0 billion, with $6.5 billion expected to be paid within 12 months.What is the balance of the deemed repatriation tax payable as of September 30, 2023?[/INST]$22.0 billion </s>

[INST]In addition to its contractual cash requirements, the Company has an authorized share repurchase program. The program does not obligate the Company to acquire a minimum amount of shares. As of September 30, 2023, the Company’s quarterly cash dividend was $0.24 per share.How much was the quarterly cash dividend per share as of September 30, 2023?[/INST]$0.24 per share </s>

[INST]Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.What does the Company's management use as the basis for making judgments about the carrying values of assets and liabilities?[/INST]Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances. </s>

[INST]The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results.What could have a material impact on the Company’s financial condition and operating results if resolved in a manner inconsistent with management’s expectations?[/INST]Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What type of situations will the company record a liability for legal proceedings?[/INST]The company will record a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What could have a material impact on the Company’s financial condition and operating results?[/INST]Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What requires significant judgment in the context of legal and other contingencies?[/INST]The determination of when a liability is probable and reasonably estimable requires significant judgment. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What does the Company face in the ordinary course of business related to legal matters?[/INST]The Company faces various legal proceedings and claims in the ordinary course of business. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25Why are the outcomes of various legal proceedings and claims inherently uncertain?[/INST]The outcomes are inherently uncertain because they arise in the ordinary course of business and involve various legal proceedings and claims. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25Under what condition will the Company record a liability?[/INST]The Company will record a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What could affect the Company’s financial condition and operating results?[/INST]Resolution of legal matters in a manner inconsistent with management’s expectations could affect the Company’s financial condition and operating results. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What does the Company need to determine before recording a liability for legal contingencies?[/INST]The Company needs to determine that it is probable a loss has been incurred and the amount is reasonably estimable before recording a liability. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What aspect of recording a liability for legal matters requires significant judgment?[/INST]Determining when it is probable that a loss has been incurred and the amount is reasonably estimable requires significant judgment. </s>

[INST]results. Legal and Other Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, the outcomes of which are inherently uncertain. The Company records a liability when it is probable that a loss has been incurred and the amount is reasonably estimable, the determination of which requires significant judgment. Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition and operating results. Apple Inc. | 2023 Form 10-K | 25What could have a material impact on the Company's financial condition?[/INST]Resolution of legal matters in a manner inconsistent with management’s expectations could have a material impact on the Company’s financial condition. </s>

[INST]Item 1A. Risk Factors The Company’s business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described below. When any one or more of these risks materialize from time to time, the Company’s business, reputation, results of operations, financial condition and stock price can be materially and adversely affected. Because of the following factors, as well as other factors affecting the Company’s results of operations and financial condition, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. This discussion of risk factors contains forward-looking statements. This section should be read in conjunction with Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes in Part II, Item 8, “Financial Statements and Supplementary Data” of this Form 10-K. Macroeconomic and Industry Risks The Company’s operations and performance depend significantly on global and regional economic conditions and adverse economic conditions can materially adversely affect the Company’s business, results of operations and financial condition. The Company has international operations with sales outside the U.S. representing a majority of the Company’s total net sales. In addition, the Company’s global supply chain is large and complex and a majority of the Company’s supplier facilities, including manufacturing and assembly sites, are located outside the U.S. As a result, the Company’s operations and performance depend significantly on global and regional economic conditions. Adverse macroeconomic conditions, including slow growth or recession, high unemployment, inflation, tighter credit, higher interest rates, and currency fluctuations, can adversely impact consumer confidence and spending and materially adversely affect demand for the Company’s products and services. In addition, consumer confidence and spending can be materially adversely affected in response to changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic factors. In addition to an adverse impact on demand for the Company’s products and services, uncertainty about, or a decline in, global or regional economic conditions can have a significant impact on the Company’s suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners, and developers. Potential outcomes include financial instability; inability to obtain credit to finance business operations; and insolvency. Adverse economic conditions can also lead to increased credit and collectibility risk on the Company’s trade receivables; the failure of derivative counterparties and other financial institutions; limitations on the Company’s ability to issue new debt; reduced liquidity; and declines in the fair values of the Company’s financial instruments. These and other impacts can materially adversely affect the Company’s business, results of operations, financial condition and stock price. The Company’s business can be impacted by political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions. Political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions can harm or disrupt international commerce and the global economy, and could have a material adverse effect on the Company and its customers, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners. Apple Inc. | 2023 Form 10-K | 5 The Company has a large, global business with sales outside the U.S. representing a majority of the Company’s total net sales, and the Company believes that it generally benefits from growth in international trade. Substantially all of the Company’s manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam. Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect the Company’s operations and supply chain and limit the Company’s ability to offer and distribute its products and services to customers. The impact can be particularly significant if these restrictive measures apply to countries and regions where the Company derives a significant portion of its revenues and/or has significant supply chain operations. Restrictive measures can require the Company to take various actions, including changing suppliers, restructuring business relationships, and ceasing to offer third-party applications on its platforms. Changing the Company’s operations in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to the Company’s operations. Such restrictions can be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse impacts from such measures. For example, tensions between governments, including the U.S. and China, have in the past led to tariffs and otherWhat factors can materially and adversely affect the Company's business, reputation, results of operations, financial condition, and stock price?[/INST]Factors include global and regional economic conditions, adverse macroeconomic conditions, changes in fiscal and monetary policy, financial market volatility, declines in income or asset values, and other economic aspects. Additionally, political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents, and other business interruptions can also have a material adverse effect. </s>

[INST]Political events, trade and other international disputes, war, terrorism, natural disasters, public health issues, industrial accidents and other business interruptions can harm or disrupt international commerce and the global economy, and could have a material adverse effect on the Company and its customers, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other channel partners. Apple Inc. | 2023 Form 10-K | 5 The Company has a large, global business with sales outside the U.S. representing a majority of the Company’s total net sales, and the Company believes that it generally benefits from growth in international trade. Substantially all of the Company’s manufacturing is performed in whole or in part by outsourcing partners located primarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam. Restrictions on international trade, such as tariffs and other controls on imports or exports of goods, technology or data, can materially adversely affect the Company’s operations and supply chain and limit the Company’s ability to offer and distribute its products and services to customers. The impact can be particularly significant if these restrictive measures apply to countries and regions where the Company derives a significant portion of its revenues and/or has significant supply chain operations. Restrictive measures can require the Company to take various actions, including changing suppliers, restructuring business relationships, and ceasing to offer third-party applications on its platforms. Changing the Company’s operations in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to the Company’s operations. Such restrictions can be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse impacts from such measures. For example, tensions between governments, including the U.S. and China, have in the past led to tariffs and otherHow can restrictive measures on international trade impact the Company?[/INST]Restrictive measures on international trade, such as tariffs and other controls on imports or exports, can adversely impact the Company's operations and supply chain. This can limit the Company’s ability to offer and distribute its products and services to customers and may require the Company to change suppliers, restructure business relationships, and cease offering certain third-party applications. Implementing these changes can be costly, time-consuming, and disruptive to operations. </s>

[INST]Changing the Company’s operations in accordance with new or changed restrictions on international trade can be expensive, time-consuming and disruptive to the Company’s operations. Such restrictions can be announced with little or no advance notice and the Company may not be able to effectively mitigate all adverse impacts from such measures.What can make changing the company's operations in accordance with new or changed restrictions on international trade expensive, time-consuming, and disruptive to operations?[/INST]Changing the Company's operations in accordance with new or changed restrictions on international trade can be costly, time-consuming, and disruptive because such restrictions can be announced with little or no advance notice, and the Company may not be able to effectively mitigate all adverse impacts from such measures. </s>

[INST]For example, tensions between governments, including the U.S. and China, have in the past led to tariffs and other restrictions being imposed on the Company’s business. If disputes and conflicts further escalate in the future, actions by governments in response could be significantly more severe and restrictive and could materially adversely affect the Company’s business.What are some potential impacts on the Company's business due to tensions between governments such as the U.S. and China?[/INST]Tensions between governments, including the U.S. and China, have in the past led to tariffs and other restrictions being imposed on the Company’s business. If disputes and conflicts further escalate, actions by governments could be more severe and restrictive, materially adversely affecting the Company’s business. </s>

[INST]The Company has a minority market share in the global smartphone, personal computer and tablet markets. 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 digital content supplier relationships. 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.What factors contribute to the Company facing substantial competition in the markets for smartphones, personal computers, and tablets?[/INST]The Company faces substantial competition in these markets from companies with significant technical, marketing, distribution and other resources, established hardware, software and digital content supplier relationships, broader product lines, lower-priced products, and larger installed base of active devices. Additionally, competition has intensified as competitors have aggressively cut prices and lowered product margins. </s>

[INST]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. Effective intellectual property protection is not consistently available in every country in which the Company operates. If the Company is unable to continue to develop and sell innovative new products with attractive margins or if competitors infringe on the Company’s intellectual property, the Company’s ability to maintain a competitive advantage could be materially adversely affected.Why is the Company's ability to maintain a competitive advantage potentially at risk?[/INST]The Company's ability to maintain a competitive advantage is at risk because many of its competitors seek to compete through aggressive pricing, very low cost structures, and by imitating the Company's products and infringing on its intellectual property. Moreover, effective intellectual property protection is not consistently available in every country in which the Company operates. </s>

[INST]Defects can also exist in components and products the Company purchases from third parties. Component defects could make the Company’s products unsafe and create a risk of environmental or property damage and personal injury. These risks may increase as the Company’s products are introduced into specialized applications, including health. In addition, the Company’s service offerings can have quality issues and from time to time experience outages, service slowdowns or errors. As a result, from time to time the Company’s services have not performed as anticipated and may not meet customer expectations. There can be no assurance the Company will be able to detect and fix all issues and defects in the hardware, software and services it offers. Failure to do so can result in widespread technical and performance issues affecting the Company’s products and services. In addition, the Company can be exposed to product liability claims, recalls, product replacements or modifications, write-offs of inventory, property, plant and equipment or intangible assets, and significant warranty and other expenses, including litigation costs and regulatory fines. Quality problems can also adversely affect the experience for users of the Company’s products and services, and result in harm to the Company’s reputation, loss of competitive advantage, poor market acceptance, reduced demand for products and services, delay in new product and service introductions and lost sales.What risks can defects in components and products purchased from third parties create for the Company?[/INST]Defects in components and products purchased from third parties can make the Company's products unsafe, creating a risk of environmental or property damage and personal injury. The Company could also face product liability claims, recalls, product replacements or modifications, inventory write-offs, significant warranty and other expenses, including litigation costs and regulatory fines. </s>

[INST]The Company is exposed to the risk of write-downs on the value of its inventory and other assets, in addition to purchase commitment cancellation risk. The Company records a write-down for product and component inventories that have become obsolete or exceed anticipated demand, or for which cost exceeds net realizable value. The Company also accrues necessary cancellation fee reserves for orders of excess products and components. The Company reviews long-lived assets, including capital assets held at its suppliers’ facilities and inventory prepayments, for impairment whenever events or circumstances indicate the assets may not be recoverable. If the Company determines that an impairment has occurred, it records a write-down equal to the amount by which the carrying value of the asset exceeds its fair value. Although the Company believes its inventory, capital assets, inventory prepayments and other assets and purchase commitments are currently recoverable, there can be no assurance the Company will not incur write-downs, fees, impairments and other charges given the rapid and unpredictable pace of product obsolescence in the industries in which the Company competes.What measures does the Company take to address the risk associated with excess or obsolete inventory?[/INST]The Company records a write-down for product and component inventories that have become obsolete or exceed anticipated demand, or for which cost exceeds net realizable value. It also accrues necessary cancellation fee reserves for orders of excess products and components, and reviews long-lived assets for impairment whenever events or circumstances indicate the assets may not be recoverable. </s>

[INST]The Company’s minority market share in the global smartphone, personal computer and tablet markets can make developers less inclined to develop or upgrade software for the Company’s products and more inclined to devote their resources to developing and upgrading software for competitors’ products with larger market share. When developers focus their efforts on these competing platforms, the availability and quality of applications for the Company’s devices can suffer.Why might developers be less inclined to develop or upgrade software for the Company's products?[/INST]The Company's minority market share in the global smartphone, personal computer, and tablet markets might make developers less inclined to develop or upgrade software for the Company's products and more inclined to focus on competitors' products with larger market shares. </s>