Apple Inc.

Capital structure and performance · Dividend policy and capital allocation

The Company believes the price of its stock should reflect expectations that its cash dividend will continue at current levels or grow, and that its current share repurchase program will be fully consummated. Future dividends are subject to declaration by the Company's Board of Directors, and the Company's share repurchase program does not obligate it to acquire any specific number of shares.

Market and investment · Asset valuation and impairment

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. Although the Company believes its inventory and other assets are currently recoverable, there can be no assurance the Company will not incur write-downs given the rapid and unpredictable pace of product obsolescence.

Market and investment · Market volatility and economic cycles

The Company's stock has experienced substantial price volatility in the past and may continue to do so in the future. Additionally, the Company, the technology industry and the stock market as a whole have experienced extreme stock price and volume fluctuations.

Information management · Technology vendor dependence

The Company's future performance depends in part on support from third-party software developers. There can be no assurance third-party developers will continue to develop and maintain software applications and services for the Company's products.

Digital transformation and innovation · Artificial intelligence and automation

The introduction of new and complex technologies, such as artificial intelligence features, can increase these and other safety risks, including exposing users to harmful, inaccurate or other negative content and experiences.

Cybersecurity and data protection · Third party data security and vendors

The Company's business also requires it to share confidential information with suppliers and other third parties. The Company relies on global suppliers that are also exposed to ransomware and other malicious attacks that can disrupt business operations.

Innovation and product development · Intellectual property protection and infringement

The Company has faced and continues to face a significant number of patent claims relating to its cellular-enabled products. Technology and other patent-holding companies frequently assert their patents and seek royalties and often enter into litigation based on allegations of patent infringement.

Market position and competition · Market cyclicality and demand volatility

The Company expects its quarterly net sales and results of operations to fluctuate. 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.

Strategic execution · Merger acquisition and divestiture risks

The Company has invested, and in the future may invest, in new business strategies or acquisitions. Such endeavors may involve significant risks and uncertainties, including distraction of management from current operations, greater-than-expected liabilities and expenses, and potential impairment of tangible and intangible assets.

Innovation and product development · Time to market and commercialization risks

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. There can be no assurance these investments will achieve expected returns, and the Company may not be able to develop and market new products and services successfully.

Supply chain and procurement · Raw material availability and cost volatility

Because the Company currently obtains certain components from single or limited sources, the Company is subject to significant supply and pricing risks. For example, the global semiconductor industry has in the past experienced high demand and shortages of supply, which adversely affected the Company's ability to obtain sufficient quantities of components and products on commercially reasonable terms.

Core operations · Operational disruption and business continuity

The Company and its global supply chain are dependent on complex information technology systems and are exposed to information technology system failures or network disruptions caused by natural disasters, accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, ransomware or other cybersecurity incidents.

Data and privacy · Data protection and privacy laws

The Company is subject to an increasing number of federal, state and international laws relating to the collection, use, retention, security and transfer of various types of personal information. Complying with emerging and changing requirements causes the Company to incur substantial costs and has required and may in the future require the Company to change its business practices.

Legal and litigation · Litigation and legal proceedings

The Company is subject to various claims, legal proceedings and government investigations that have arisen in the ordinary course of business. The number of claims, legal proceedings and government investigations involving the Company has generally increased over time and may continue to increase.

Tax and financial reporting · Audit and regulatory examinations

The Company is also subject to the examination of its tax returns and other tax matters by the U.S. Internal Revenue Service and other tax authorities and governmental bodies. There can be no assurance as to the outcome of these examinations.

Economic and market conditions · Economic recession and downturns

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. 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.

Natural and catastrophic events · Natural disasters and extreme weather

Many of the Company's operations and facilities, as well as critical business operations of the Company's suppliers and contract manufacturers, are in locations that are prone to earthquakes and other natural disasters. Global climate change is resulting in certain types of natural disasters and extreme weather occurring more frequently or with more intense effects.

Geopolitical and trade · Trade policies tariffs and sanctions

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 business and supply chain. For example, tensions between governments, including the U.S. and China, have in the past led to tariffs and other restrictions affecting the Company's business.

Stakeholder relations · Supplier and vendor relationships

The Company relies on single-source outsourcing partners in the U.S., Asia and Europe to supply and manufacture many components, and on outsourcing partners primarily located in Asia, for final assembly of substantially all of the Company's hardware products. Any failure of these partners to perform can have a negative impact on the Company's cost or supply of components or finished goods.

Stakeholder relations · Employee engagement and culture

The Company believes that its distinctive and inclusive culture is a significant driver of its success. If the Company is unable to nurture its culture, it could materially adversely affect the Company's ability to recruit and retain the highly skilled employees who are critical to its success.