Apple Inc.: Top Shareholders and Capital Structure
Apple Inc. is one of the top five IT giants in the United States. Rallying beside Amazon, Google, Microsoft, and Facebook, Apple is a pioneer in innovative technologies that drive the global market in consumer electronics, software, and other online services. They specialize in creating hardware and software products along with professional applications for their operations. Apple is headquartered in Cupertino, California.
About Apple Inc.
Apple’s journey began in 1976 when Steve Jobs, Steve Wozniak, and Ronald Wayne founded the company to create and market Wozniak’s personal computer Apple I. But Wayne sold all his shares to Wozniak within 12 days of the company formation. After its official incorporation as Apple Computer Inc. in 1977 and the introduction of Apple II, business began to accelerate. A small team of computer designers along with an efficient production line inside Steve Job’s garage is where the Apple story began.
Eventually, Apple went public in 1980 to become a financial hit. Apple began to create computers with its original Macintosh interface and by 1984 the acceptance of Apple products became widespread and the IT industry acknowledged their technological breakthroughs. However, there were few setbacks. Apple products were highly-priced and their application library was a limited source. By this time, there were power struggles in the management as well.
In 1985, Wozniak and Jobs departed. Wozniak chose to be an honorary employee and Jobs founded NeXT. Meanwhile, Microsoft Windows operating system on Intel computers entered the market and Apple lost considerable market shares to them. The beginning of the ’90s was a tough time for Apple. In an attempt to revive the business, the board recruited Gil Amelio as the CEO. Amelio quickly adopted many restructuring strategies and brought back Steve Jobs as the CEO by leading Apple to buy NeXT in 1997.
With Jobs back on board, Apple revamped its strategies and gained back market shares under the ‘Think Different’ campaign. By 2001 Apple launched pioneering products such as iMac and iPod, acquired many software firms to broaden its portfolio, and opened a retail chain of Apple stores. The company eventually shifted focus towards consumer electronics and was renamed Apple Inc. in 2007. iPhone was the star product of this revamp and became an instant financial success.
In 2011, Tim Cook was appointed as the new CEO as Jobs had to resign due to health complications. Two months later, Jobs passed away. But today Apple is one of the most valued companies in the world and the largest in revenue.
Since its inception, the Apple team has seen considerable changes in leadership positions. These transitions have enabled the company to be led by talented people who steered the business through various highs and lows. Here is a snapshot of team members.
Board of Directors as of October 2019
|Arthur D. Levinson||Chairman|
|Tim Cook||Executive director and CEO|
|James A. Bell||Non-Executive Director|
|Al Gore||Non-Executive Director|
|Andrea Jung||Non-Executive Director|
|Ronald Sugar||Non-Executive Director|
|Susan Wagner||Non-Executive Director|
Executive management as of March 2021
|Tim Cook||Chief Executive Officer|
|Jeff Williams||Chief Operating Officer|
|Luca Maestri||Senior Vice President and Chief Financial Officer|
|Katherine L. Adams||Senior Vice President and General Counsel|
|Eddy Cue||Senior Vice President – Internet Software and Services|
|Craig Federighi||Senior Vice President – Software Engineering|
|John Giannandrea||Senior Vice President – Machine Learning and AI Strategy|
|Deirdre O'Brien||Senior Vice President – Retail + People|
|John Ternus||Senior Vice President – Hardware Engineering|
|Greg Josiwak||Senior Vice President – Worldwide Marketing|
|Johny Srouji||Senior Vice President – Hardware Technologies|
|Sabih Khan||Senior Vice President– Operations|
|Lisa P. Jackson||Vice President – Environment, Policy, and Social Initiatives|
|Isabel Ge Mahe||Vice President and Managing Director – Greater China|
|Tor Myhren||Vice President – Marketing Communications|
|Adrian Perica||Vice President – Corporate Development|
Apple’s market valuation is one of the highest today. Despite the persistent competition in the industry, innovations, and diversity in the Apple product line have kept up their momentum. Apple is also known to develop its own operating systems to run all its devices. This includes MacOS for computers, iOS for phones and tablets, watch OS for smartwatches, and tvOS for smart TVs. Here are some of the important Apple products in the market today:
- Macintosh: This is Apple’s line of personal computers. It is a completely homegrown product designed, manufactured, and sold by Apple since 1984. The product lines currently in circulation are:
- iMac: Consumer all-in-one desktop computer
- iMac Pro: Professional all-in-one desktop computer
- Mac Mini: Consumer sub-desktop computer
- MacBook Pro: Professional notebook
- Mac Pro: Workstation desktop computer
- MacBook Air: Consumer ultra-thin, ultra-portable notebook
- iPod: This is Apple’s portable digital music player. It was introduced in 2001 and was one of the strongest players in the industry. However, by 2017 Apple had to discontinue iPod nano and iPod shuffle. At present, the iPod touch alone is in circulation.
- iPhone: The first generation of the iPhone hit the markets in June 2007. It was launched by Steve Jobs at the Macworld Conference & Expo in January early that year as an innovative convergence of internet-enabled phone and iPod. Ever since the iPhone brand has been a craze among tech enthusiasts, professionals, and consumers alike. The latest models were launched on 13 October 2020 as iPhone 12, iPhone 12 mini, iPhone 12 Pro, and iPhone 12 Pro Max.
- iPad: This is Apple’s media tablet. This was launched in Jan 2010 and offers multi-touch interaction with multimedia formats. It also carries a mobile version of Safari for web browsing, App store access, iTunes library, iBookstore, contacts & notes. The latest model is the iPadPro launched in June 2017.
- Apple Watch: This is a smartwatch announced by Tim Cook in Sept 2014. It was positioned as a product for health and fitness tracking. The latest model of Apple Watch Series 6 lays a stronger emphasis on fitness, allowing measurement of blood oxygen & ECGs.
- Apple TV: This was first demonstrated as iTV by Steve Jobs in 2007 at the Macworld Conference. iTV was one of the greatest innovations of its time. It operates on a variant of Mac OSx, connects with the user’s TV, and allows wireless sync with the user computer’s iTunes library. A software update later launched in 2008 allowed media to be purchased directly from Apple TV. In 2019, Apple announced Apple TV+ which is an upcoming subscription-based OTT platform. However, owing to the global pandemic, further updates have been stalled.
Apple market share and success
Apple is the first US Company to have hit a $2 trillion market cap. The company had reached the $1 trillion mark in 2018 and since then Apple’s market valuation has doubled in just over two years. For the fiscal year 2020, Apple’s worldwide annual revenue was $274.5 billion. As of January 2021, Apple is the world’s 4th largest smartphone manufacturer and the world’s 4th largest personal computer vendor by unit sales.
Apple’s Capital Structure
Capital structure is a measure of how much equity or debt a company uses to finance its operations. In this aspect, Apple is one of the most successful business models of the 21st century. They are pioneers not only in technology innovations but their finance model as well. Apple capital structure is one of its kind and a strong foundation on which this company is built. Here is a look into how this works:
Equity is an indicator of company shareholdings. Investors, employees, executives, and all others who own shares in a company are its shareholders. A later section is dedicated to Apple top shareholders. Apple has done a great job by leveraging debt and increasing equity. As of June 2019, Apple’s total stockholder equity was $96.5 billion. Apple has close to 4.57 billion shares outstanding.
Debt capitalization is a measure of how much a company is in debt. It indicates the value a company owes to its creditors. This measure is the second most important factor of Apple capital structure. As of June 2019, Apple’s current liabilities were $89.7 billion. Of this $29.1 billion was in accounts payable and $13.5 billion were in short-term notes and bonds. Meanwhile $136 billion were in long-term debt and other non-current liabilities. Thus Apple’s total liabilities were $225.8 billion which is an increase of nearly 63% over the last three years.
Debt vs Equity
The debt to equity ratio helps determine the extent of ownership in the company versus the amount of money the company owes to its creditors. Apple debt to equity ratio has grown steadily over the years. As of 2016, this measure for Apple was 50%. But over three years after that, this value escalated to 112% portraying a robust capital structure of the company.
Apple Inc. Shareholders
Apple is currently the world’s largest business by market value. Institutional shareholders form the major chunk of equity holders with close to 60% outstanding shares in the company. Here is a brief about the individuals and institutions who are Apple top shareholders.
Top 3 individual shareholders
Arthur Levinson joined Apple in 2000. He has been Chairman of the Apple board since 2011 and served on all the three board committees – audit & finance, nominating & corporate governance, and compensation. As of Dec 2020, he owns 4,592,140 shares making him an Apple top shareholder.
Tim Cook joined Apple in 1998. He headed Apple’s Macintosh division and as COO handled all worldwide sales and operations. He also played a continued role in developing strategic reseller and supplier relationships. Tim Cook owns 837,374 shares of Apple.
Jeff Williams joined Apple in 1998. His initial roles were as Senior Vice President Operations and Head of worldwide procurement. He also handled overseas operations and the development of Apple Watch & Apple’s health initiatives. As of Dec 2020, Jeff Williams owns 489,260 shares of Apple stock.
Top 3 institutional shareholders
Vanguard Group Inc.
Vanguard Group is an Apple top shareholder among institutional equity owners. It is a mutual fund and ETF Management Company. It manages $6.2 trillion in global assets. Apple is its top holding and forms 6.7% of its portfolio as of Dec 2020. The Vanguard Group owns more than 1.3 billion shares of Apple which are about 7.46% of total shares outstanding as of Dec 2020.
Blackrock Inc is a mutual fund & ETF management company as well. It has close to $8.67 trillion in asset management globally. Apple is its second-largest holding forming 6.28% of the portfolio. Blackrock Inc owns 1.11 billion shares of Apple representing 6.28% of total shares outstanding.
Berkshire Hathway Inc.
Led by Warren Buffet, Berkshire Hathaway is a diversified holding company. They have holdings in a wide range of industries including insurance, railroads, gas, electric utilities, & more. As of Dec 2020, Berkshire Hathway owns 5.27% of total shares outstanding that amounts to almost 1 billion shares.
Apple Stock for Apple Employees
Apple is an equal opportunity employer. They ensure equal pay for men and women. However, in the initial days stock grants were limited only for high-ranking executives. In 2015, Tim Cook changed this and made stock grants available for all employees of Apple. This was an unusual move as Apple’s contemporaries like Google and Facebook were offering stocks only to top management. But Apple extended this benefit for all employees across the company including those in retail as well as AppleCare workers.
Manage Company Shareholders and Equity on Eqvista
Shareholder information is initially managed manually on excel sheets. But as the business expands and multiple stakeholders come on board, automating the process is the best thing to do. This minimizes errors and helps streamline stakeholder communications. Eqvista is one of the leading equity management software today. Among other features, it allows customized access to all stakeholders to view their shareholding details in real-time. These articles provide an idea about the various services offered by Eqvista. To know more about Eqvista, reach us today!