Apple Inc. v. Psystar Corporation

Filing 100

MEMORANDUM in Opposition re 91 Letter Brief Supplemental Brief Opposing Psystar's Motion to Compel and In Support of Apple's Cross Motion for Protective Order filed byApple Inc.. (Attachments: # 1 Affidavit Decl. of Tyler Gee ISO Supplemental Brief Opposing Motion to Compel, # 2 Exhibit Ex. A to Decl. of Tyler Gee, # 3 Exhibit Ex. B to Decl. of Tyler Gee, # 4 Exhibit Ex. C to Decl. of Tyler Gee, # 5 Exhibit Ex. D to Decl. of Tyler Gee, # 6 Exhibit Ex. E to Decl. of Tyler Gee)(Related document(s) 91 ) (Boroumand Smith, Mehrnaz) (Filed on 8/27/2009)

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Apple Inc. v. Psystar Corporation Doc. 100 Att. 1 Case3:08-cv-03251-WHA Document100-2 Filed08/27/09 Page1 of 3 EXHIBIT A TO DECLARATION OF TYLER GEE IN SUPPORT OF APPLE INC.'S SUPPLEMENTAL BRIEF OPPOSING PSYSTAR'S MOTION TO COMPEL AND IN SUPPORT OF APPLE'S CROSS MOTION FOR PROTECTIVE ORDER Dockets.Justia.com Form lO-K Case3:08-cv-03251-WHA Document100-2 Pa Filed08/27/09 Page2 of 3ge 1 of98 10-K 1 dlOk.htm FORM 10-K Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form lO-K (MarkOne) 18 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 27, 2008 or D TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCIlANGE ACT OF 1934 For the transition period from to Commission fie number: 000-10030 APPLE INC. (Exact name of registrant as specified in its charer) California (State or other jurisdiction of incorporation or organization) 94-2404110 (I.R.S. Employer Identification No.) (Address of Cprincipalnexecutive offces) (Zip Code) uperti o, California 95014 1 Infinite Loop Registrant's telephone number, including area code: (408) 996-1010 Securities registered pursuant to Section 12(b) of the Act: Common Stock, no par value The NASDAQ Global Select Market (Title of class) (Name of exchange on which registered) Securities registered pursuant to Section 12(g) ofthe Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of NoD No l8 the Securities Act. Yes l8 Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15( d) of the Act. Yes 0 Indicate by check mark whether the registrant (1) has fied all report required to be filed by Section 13 or 15(d) ofthe Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes l8 No 0 Regulation S-K (section 229.405 of this chapter) is not contained herein, and wil not be contained, to the best ofthe registrant's knowledge, in definitive proxy or information statements incorporated by reference in Par II of this Form lO-K or any amendment to this Form 10-K. l8 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated fier, a non-accelerated fier, or a smaller reporting company. See the definitions of "large accelerated fier," "accelerated filer" and "smaller reporting Indicate by check mark if disclosure of delinquent fiers pursuant to Item 405 of company" in Rule 12b-2 of the Exchange Act. http://ww.sec.gov/Archives/edgar/data/320193/000119312508224958/d10k.htm 8/27/2009 Form 10-K Case3:08-cv-03251-WHA Document100-2 Filed08/27/09 Page3 ofPage 1 of 1 3 I.al)J~.of .cøntents Gross Margin Gross margin for the three fiscal years ended September 27, 2008, are as follows (in milions, except gross margin percentages): Net sales $ 32,479 $ 24,006 $ 19,315 Cost of 2008 200 200 sales Grrossmargin21,334 15,852 13,717 margin $ 11,145 $ 8,154 $ 5,598 G oss percentage 34.3% 34.0% 29.0% Gross margin percentage was relatively flat in 2008 as compared to 2007. Gross margin percentage of34.0% in 2007 increased significantly from 29.0% in 2006. The primar drivers ofthis increase were more favorable costs on certain commodity components, including NAND flash memory and DRAM memory, higher overall revenue that provided for more revenue from the Company's direct sales channels. leverage on fixed production costs and a higher percentage of The Company expects its gross margin percentage to decrease in future periods compared to levels achieved during 2008 and 2007, and anticipates gross margin levels of about 30% in 2009. This expected decline is due largely to the anticipated impact of product transitions, flat or reduced pricing on new and innovative products that have higher cost structures, both expected and potential future cost increases for key components, a stronger U.S. dollar, and higher logistical costs. The foregoing statements regarding the Company's expected gross margin percentage are forward-looking and could differ from anticipated levels because of several factors, including but not limited to certain ofthose set forth below in Par I, Item lA, "Risk Factors" under the subheading "Future operating results depend upon the Company's abilty to obtain key components including, but not limited to microprocessors, NAND flash memory, DRAM and LCDs at favorable prices and in suffcient quantities," which is incorporated herein by reference. There can be no assurance that tageted gross margin percentage levels wil be achieved. In general, gross margins and margins on individual products wil remain under downward pressure due to a variety offactors, including continued industr wide global product pricing pressures, increased competition, compressed product life cycles, product transitions and expected increases in the cost of key components including, but not limited to microprocessors, NAND flash memory, dynamic random access memory ("DRAM") and liquid crystal displays ("LCDs"), as well as potential increases in the costs of outside manufacturing services and a potential shift in the Company's . sales mix towards products with lower gross margins. In response to these competitive pressures, the Company expects it wil continue to take product pricing actions, which would adversely affect gross margins. Gross margins could also be affected by the Company's abilty to manage product quality and warranty costs effectively and to stimulate demand for certain of its products. Due to the Company's significant international operations, financial results can be significantly affected in the shortterm by fluctuations in exchange rates. Operating Expenses Operating expenses for the three fiscal years ended September 27,2008, are as follows (in milions, except for percentages): 2008 2007 Research and development Percentage of net sales Sellng, general, and administrative $ 1,109 3.4% $ 3,761 $ 782 3.3% $ 2,963 200 $ 712 3.7% $ 2,433 Percentage of net sales 11.6% 12.3% 12.6% Research and Development ("R&D") Expenditures for R&D increased 42% or $327 milion to $1. bilion in 2008 compared to 2007. These increases were due primarily to an increase in R&D headcount in the current year to support expanded R&D activities and higher stock-based compensation expenses. In 2008, $11 milion of softare development costs were capitalized 46 http://ww.sec.gov/Archives/edgar/data/320193/000119312508224958/d10k.htm 8/27/2009

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