THE BUSINESSWEEK 50 RANKINGS + 25

34

Apple

Somewhere along the line, Apple went from being Microsoft’s whipping boy to becoming, in some ways, the new Microsoft. Apple sets the standard in digital music, with more than 70% of the music player market and nearly 90% of the song download business. While it still has just 5% of the PC market, Mac sales are on the rise, and the company is attacking vast new markets that have long been coveted by Microsoft. Targets include the so-called digital living room, where Apple hopes to stream Net video fare to the TV via its new Apple TV gizmo, and the mobile communications sector, where it’s rolling the iPhone in hopes of replicating its iPod success. The company, which churns out an astonishing $1 billion a quarter in cash, was cast in the unfamiliar role of bad guy numerous times in the last year—for Steve Jobs’ role in the options backdating scandal and for sweatshop conditions at a contract manufacturer in China, among other things. But barring unexpected product bombs, Apple’s star seems destined to rise farther still.

Overall Grade

A

Market Data

AAPL

Market Value
(2/28/2007)

$72.8 Billion

Profitability*

23.9%

B

Sales Growth Rate**

47.2%

A

12-Month Sales

$20.7 Billion

12-Month Net Income

$2.4 Billion

Total Return Past 12 Months

23.5%

Past 36 Months

607.4%

Economic SectorInformation Technology
IndustryComputer Hardware
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
$FOOTNOTE

Steve P. Jobs

Steve P. Jobs, 52

CEO since 1997


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Data as of 2/28/07 provided by Standard & Poor's Compustat