Apple Reports Higher Staffing, Larger Ad Budget and Lower Margins

Apple Reports Higher Staffing, Larger Ad Budget and Lower Margins

Publicly-traded companies are obliged to file annual reports with the U.S. Securities and Exchange Commision. Most are dry, recitations of a firm’s plans and projections, but sometimes they give insight into an otherwise tight-lipped organization, such as Apple. The Cupertino, Calif. company, riding high from its recent iPhone 4 and iPad successes, has increased its staff by a third, hiked its advertising budget and isn’t expecting any big acquisitions in 2011.

Apple has 26,500 employees, a third more than the 10,000 reported in 2009. The increase may be linked to the company’s retail expansion. The iPad maker has 317 retail stores, up from 273 a year ago. The company told federal regulators it plans to open 50 more retail locations in 2011.

Don’t expect 2011 gross profits to be higher than this year, Apple advised. The company “expects its gross margin percentage to decrease in future periods compared to levels achieved during 2010.” Analysts expect Apple’s margins could rise into the “low 50 range” after taking a beating from product shortages and offering free iPhone 4 bumpers.

Hinting at its recent $999 MacBook Air and its retooled $99 Apple TV, the company said any gross profit margin “is largely due to a igher mix of new and innovative products … and expected future component cost and other cost increases.”

Another comment may throw cold water on observers expecting Apple to announce a high-profile acquisition. The company expects capital expenditures of $4 billion in fiscal 2011, including $600 million for retail stores. Recent headlines have speculated the company might purchase Sony, Adobe, even Disney.

[9to5Mac, AppleInsider]

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Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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