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Apple

Tracey Nearmy/AP Photo

By Peter Burrows

Apple

Location: Cupertino, Calif.
Industry: Information Technology
Annual Sales: $24 billion

It’s the epitome of cool—a company that has gained a cultlike following because it somehow manages to breathe new life into every category it touches. From sleek laptops to the even sleeker iPhone, Apple (AAPL) products are imaginative, irreverent, and pleasing to the eye. They’re fun to use and have wreaked havoc on competitors. Consider how the iPod and iTunes software created a new business model for the global music industry. CEO Steve Jobs’ initial pitch in 2001: Put 1,000 songs in your pocket. Slowing iPod sales are just a sign of how ubiquitous the music player has become.

Now Jobs is shaking up the tech industry again with the iPhone. Apple has sold more than 13 million of them in the past 18 months. Samsung, Research in Motion (creator of the BlackBerry), and LG Electronics (page 56) have tried to copy its touchscreen-based design while counterfeiters raced to produce knockoffs.

One-Stop Shop
What rivals lack is the App­Store. Instead of just using a smartphone for talking and e-mail, Apple customers can download more than 10,000 applications within seconds on their iPhones. One lets you turn your iPhone into a flute. Other applications enable inventory tracking. Outsiders make them, and Apple keeps 30% of the revenue.
Now companies such as Google, T-Mobile, Microsoft, and RIM are creating AppStores of their own. Good luck. Apple’s U.S. partner, AT&T, is basking in the Apple glow. “AT&T used to be seen as this wheezing, oversized telco, but Apple’s hipness has rubbed off on it,” says tech consultant Paul Saffo.

For Apple, the key has been turning its isolated flashes of brilliance into a science. “They have been astoundingly consistent,” says Saffo. Even amid a recession, Jobs is obsessing over new products. And he knows everyone else is obsessing over what he’ll do next.