Apple Inc

Item 1A. Risk Factors

The Companys business, reputation, results of operations, financial condition and stock price can be affected by a number of factors, whether currently known or unknown, including those described in Part I, Item 1A of the 2024 Form 10-K uand Part II, Item 1A of the Form 10-Q for the quarter ender d December 28, 2024 (the hefirst quarter 2025 Form 10-Q), in each case under the heading Risk Factors. When any one or more of these risks materialize from time to time, the Companys business, reputation, results of operations, financial condition and stock price can be materially and adversely affected. Except afor the risk factors set forth below, the and those disclosed in Part II, Item 1A of the first quarter 2025 Form 10-Q, which are haereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, there have been no material changes to the Companys risk factors since the 2024 Form 10-K.

The Company is subject to complex as business can be impacted by political events, trade and changing laws and regulatother international disputes, geopolitical tensions worldwide, which exposes , conflict, terrorism, natural disasters, public health issues, industrial accidents and othe Company to potentir business interruptions.

Political events, trade and other international liabilitiedisputes, geopolitical tensions, conflict, terrorism, natural disasters, increased cospublic health issues, industrial accidents and other abusiness interruptions can have a material adverse effects on the Companys business.

The Companys global operations are subject to complex and its customers, employees, suppliers, contract manufacturers, logistics providers, distributors, cellular network carriers and other changing laws and regulations on subjects includnel partners.

The Company has a large, global business with sales outside the U.S. representing antitrust; privacy, data security a majority of the Companys total net sales, and data localization; consumer protection; advertising, sales, billing and e-commerce; financial services and technology; product liability; intellectualthe Company believes that it generally benefits from growth in international trade. A significant majority of the Companys manufacturing is performed in whole or in part by outsourcing partners located property ownership and infringement; digital platforms; machine learningimarily in China mainland, India, Japan, South Korea, Taiwan and Vietnam, in addition to sourcing from partners and artificialfacilities located intelligence;  the U.S. Restrictions on internet, telecommunicationational trade, such as tariffs and mobileother communications; mediantrols on imports or exports of goods, television, film and digital content; availability ofchnology or data, can materially adversely affect third-party software ae Companys business and supplications and services; labor and employment; anticorruption; import, export and trade; forey chain. The impact can be particularly significant if these restrictive measures apply to countries and regions where the Company derives a sign exchange controlificant portion of its revenues and cash repatri/or has significant supply chain operation rs. Restrictions; antimoney laundering; foreign ownership andve measures can investment; national security; tax; acrease the cost of the Companys products and environmthe componental, healths and rare earths and safety, including electronic waste, recycling, product designother raw materials that go into them or affect the availability of such components and climate change.

Compliance with rare earths and othese lawsr raw materials, and regulations is onercan require the Company to take various and expensive. New andctions, including changing lawsuppliers, regustructuring business relations, executive orderhips and operations, ceasing to offer and distribute affected products, directiveservices and third-party applications to its customers, and enforcementincreasing the priorities can adversely affectces of its products and services. Changing the Companys business by increasing the Companys costs, limitiand supply chain in accordance with new or changed restrictions on international trade can be expensive, time-consuming tand disruptive to the Companys ability to offer a product, service or feature to customers, imposing changes to the design ofbusiness and results of operations. Trade and other international disputes can also have an adverse impact on the Companys productsoverall macroeconomic environment and services, imparesult in shifts and reducting custoons in consumer spending and negative consumer demandsentiment for the Companys products and services, and requiring changes toll of which can further adversely affect the Companys business or supply chain. New and changing laws, regulatiand results of operations. Such restrictions, executiv can be announced with little orders, directives no advance notice, which can create uncertainty, and enforcement priorthe Company may not be able to effectively mities can also create uncertainty about how such laws and regulagate any or all adverse impacts from such measures. Beginning in the second quarter of 2025, new U.S. Tariffs were announced, including additions will be interpreted and applied.

Risks and costs related to newal tariffs on imports from China, India, Japan, South Korea, Taiwan, Vietnam and changing laws, regulatithe EU, among others. In respons, executie, several countries have orders, directives, and enforcement priorities may increase as imposed, or threatened to impose, reciprocal tariffs on imports from the U.S. and othe Companys productr retaliatory measures. Various modifications and services are introdudelays to the U.S. Tariffs have been announced into specialized applications, including health and financiaand further changes are expected to be made in the future, which may include additional services, or as ctor-based tariffs or othe Company expandsr measures. For example, the useU.S. Department of technologies, such Commerce has machine learning and artificial intelligence features, and must navigate new legal, regulainitiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, into, among other things, imports of semiconductory and ethical consis, semiconductor manufacturing equipment, and their derivations relatve products, including to such technologiedownstream products that contain semiconductors. The Company has ultimate implemented policiesact remains uncertain and procedureswill designed to ensure compliance with applicable laws and regulations, but pend on several factors, including whether additional or incremental U.S. Tariffs or othere can be no assura measures are announce the Companys employees, contractors or agents will not violate such laws andd or imposed, to what extent other countries implement tariffs or other retaliatory measures in regulatispons ore, and the Companys policiesoverall magnitude and procedduration of these measures. If the Company idisputes and conflicts found to have violated lawsurther escalate, actions by governments in response could be significantly more severe and regulations, it strictive. Any of the foregoing could materially adversely affect the Companys business, reputation, results of operations and , financial condition.

Regulatory changes and other ac and stock price.

Many of the Companys operations that materially adversely affect and facilities, as well as critical business operations of the Companys business may be announced with little or no advance noticesuppliers and contract manufacturers, are in locations that are prone to earthquakes and othe Company may not be able to effectively mitigr natural disasters. Global climate all adverse impacts from such measures. Forchange is resulting in certain types of natural disasters and example, treme weathe Company is subject to changing regulations relating tor occurring more frequently or with more intense effects. In addition, the exportCompanys and import of its products. Althoughts suppliers operations and facilities are subject to the Company has programrisk of interruption by fire, power shortages, policienuclear power plant accidents and proceduresother in place thadustrial accidents, terrorist are designed to satisfy regulatory requirements, ttacks and other hostile acts, ransomware and othere can be no assurance that such po cybersecurity attacks, labor disputes, publici health issues and procedures will be effective in prevother events beyond the Companys control. For example, global supply chains can be highly concenting a violatrated and geopolitical tensions or a claim of a violation. As a resconflict could result in significant disruptions.

Such events can make it difficult,  or impossible for the Companys products could be banned, to manufacture and delayed oiver prohibited from importation, which could mducts to its customers, createrially adversely affect  delays and inefficiencies in the Companys business, reputationsupply and manufacturing chain, results of operations and financial condition.

The technolog in slowdowns and outages to the Companys service offerings, increase the Companys costs, and negatively industry, inclumpact consumer spending, in some and demand instances, t affected areas.

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The Company, is ss operations are also subject to intense media, politicthe risks of industrial and regulatory scrutiny, which exposesccidents at its suppliers and contract manufacturers. While the Company to increasing regulation, govers suppliers are required to maintain safe working environment investigs and operations, legaan industrial actions cident could occur and penalties.

From time to timcould result in serious injuries or loss of life, tdisruption to the Company has made changess business, and harm to its App Storethe Companys reputation. Major public health issues, including actions taken in response to litigation, competition, market conditionspandemics such as the COVID-19 pandemic, have adversely affected, and legal and regulatory requirements. Tcould in the future materially adversely affect, the Company expectsdue to make further business changes iir impact on the future. For example, in the U.S. the Company has implemented changes to how developers communicate with consumers within apps on the U.S. storefroglobal economy and demand for consumer products; the imposition of protective public safety measures, such as stringent of the iOSemployee travel restrictions and iPadOS App Store regarding alternative purchasing mechanisms.

Tlimitations on freight services and the movement of products between regions; and disruptions in the Company has also implemented s operations, supply chain and sales and distribution changes to iOS, iPadOS, tnels, resulting in interruptions to the App Store supply of current products and Safari in the EU as itoffering of existing seeks to comply with the DMA, including rvices, and delays in production ramps of new business termproducts and alternative fee structures for iOSdevelopment of new services.

Following and iPadOS apps, aly internative methods of distribution for iOS and iPadOS apps, alternative payment processing for apps across the Companysruption to its business, the Company can require substantial recovery time, experience significant expenditures to resume operating systemsons, and additional tools and application programmlose significant sales. Because the Company relies on sing interfale or limited sources (APIs) for developers. Tthe Company has also continued tosupply and manufacture of make changes to itsny critical compliance plan in response to feedbackonents, a business interruption affecting such sources would exacerbate and engagement withy negative consequences to the Commission. Althoughpany. While the Companys compliance plan i maintains intended to address the DMAsurance coverage for certain types obligations, it has been challenged by the Commission and may be chf losses, such insurance coverage may be insufficient to cover allenged further by private litigants.  losses that may arise.

The DMA provides for significant finesCompany expects its quarterly net sales and penalties for noncompliance, and other jurisdictiresults of operations may seek to require tfluctuate.

The Company tos profit make changes torgins vary across its business. While the changes introduced by the Company in the EU are intended to reduce new privacy and security risks thatproducts, services, geographic segments and distribution channels. For example, the gross margins on the DMA poses to EU uCompanys products and sers, many risks will remain.

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vices vary significantly and can change over time. The Company is also currentlys gross margins are subject to antitrust investigations and litigationvolatility and downward pressure due to a variety of factors, including: continued in various jurisdicdustry-wide global product pricing pressures and product pricing actions aroundthat the world, which caCompany may take in result in legal proceedings and claims againstponse to such pressures; increased competition; the Company that could, individually s ability to effectively stimulate demand for certain the aggregate, have a materialof its products and services; compressed product life cycles; supply adverse impact oshortages; potential increases in the Companys business, results of operationscost of components, outside manufacturing services, and financialdeveloping, acquiring and delivering condition. Ftent for example, the Company is subject to civil antitrust lawsuits in the U.S. alleging monopolization or attempted monopolizationervices; the Companys ability to manage product quality and warranty costs effectively; shifts in the markets for performance smartphoneix of products and smartphoneservices, or in the generally in violation of U.S. antitrust laws. In addition,ographic, currency or channel mix, including to the extent that regulatory changes require the Company is the subjectto modify its product and service of investigferings; fluctuations in Europe and other jurisdicforeign exchange rates; inflations relating to App Store terms and cond and other macroeconomic pressures; the impositions. If such investigations or litigation are resolved against the Company, the Company can be expose of new or increased tariffs and other trade restrictions, their overall magnitude and duration, and retaliatory actions in response; and to significant fines and may be required to make further changhe introduction of new products or services, including new products or services to its business practices, all of whichwith lower profit margins. These and other factors could have a materially adversely affe impact on the Companys business, reputation, reresults of operations and , financial condition.

Further, the  and stock price.

The Company has commercial relationships with othhistorically experienced higher net sales in its first quarter companies in red to othe technologyr quarters industry that are or may become subjec its fiscal year due in part to investigations and lseasonal holiday demand. Additigation that, if resolved against those other coonally, new product and service introductions can significantly impaniesct net sales, could materially adversely affectst of sales and operating expenses. Further, the Companys commercial rela generates a significant portionships with those bu of its net sales from a siness partners gle product and a decline in demand materially adversefor that product could significantly impact quarterly affect tnet sales. The Companys business, results of operations and financial condition. F could also be subject to unexpected developments, such as lower-than-anticipated demand for example, the Company earns revenue from ls products or services, issues with new product or servicensing arrangements with Google LLC (Google) and o introductions, information technology system failures or network disruptions, or a change in or failure of one or more of ther c Companies to offer their search servicys logistics, supply or manufacturing partners.

Varied stakeholder expectations about social and other issues onexpose the Companys platforms and application to potential liabilities, anincreased certain of osts, reputational harm, and othese arrangemenr adverse effects are currently subject to gon the Companys business.

Various stakeholders, including government investigations and legal proceedings. On August 5, 2024, Google was fous, regulators, investors, employees, customers and toothers, have violated U.S. antitrust laws. In connectdiffering expectation with this finding, the DOJ has proposed remedies, which include changes to Googls about a wide range of social and other issues products, services andrelated to the Companys business models. The proposed changes vary in scope and severityCompany makes statements about its values, including the environmental and range from societal imposing significantact of its business, through various non-financial restricports, informations on Googles licensing agre provided on the Companys website, and in press statements to prohibiting Google from offering tand other communications. The Company commercialso pursues environmental terms for search distribution for up to 10 years. If impleand other goals and initiatives that involve risks and uncertainties, require investmented, such remedies could materially adversely affects, and depend in part on third-party performance or data the at is outside the Companys ability to earn revenue from such licensing arrangements.

Tcontrol, and there can be no assurance that the Companys business, results will fully achieve all of operationits goals and financial condition will not be materially initiatives. Efforts by the Company to adversely affected, individuallyance its business and values, or in the aggregate, by achieve its goals and furthe outcomes of such investigr its initiationves, litigation or changes or to laws and regulations in the future. Changes to the Companys business practices toalign with stakeholders expectations, or comply with new lawsevolving, varied and regulations or in at times connefliction with other legal proceedings can negng federal, state and internatively impact the reputonal laws, regulation of the Comps and standards, or anys products f failure or privacy and security erceived failure to do so, can result in adverse reactions by consumers and otherwise adv stakeholdersely affect, including the experiecommence for users ofment of legal and regulatory proceedings against the Companys products and services, and result in harm to, and can materially adversely affect the Companys business, reputation, lossresults of competitive advantage, poor market acceptance, reduced demoperations, financial condition and forstock products and services, lost sales, and lower profit margins..

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