Apple challenged by Linux and pirates

A recent Securities and Exchange Commission (SEC) filing has revealed that Apple now considers Linux a potential market challenger.

Apple's K-10 form – a review of its past financial year for the SEC – reveals that as well as contending with competition from Microsoft, the company now perceives a threat from open source software.

The filing says: "Over the past several years, price competition in the market for personal computers and related peripherals has been particularly intense as competitors who sell Windows and Linux based personal computers have aggressively cut prices and lowered their product margins for personal computing products."

Apple's filing continues: "The Mac OS has a minority market share in the personal computer market, which is dominated by makers of computers utilising other competing operating systems, including Windows and Linux. [Apple]'s future operating results and financial condition are substantially dependent on its ability to continue to develop improvements to the Macintosh platform in order to maintain perceived design and functional advantages over competing platforms."

Apple's Mac sales figures also feature in the filing, showing revenue from Macs has climbed significantly year-on-year – from $4.9bn in 2004 to $6.5bn during this fiscal year.

Revenues from Apple's 'music products and services' excluding the iPod have also climbed, from $278m in fiscal 2004 to $899m this year. Revenues from the iTunes Music Store pale in comparison to iPod revenues, however, which topped $4.5bn this year.

Despite Apple's massive market share in the world of online music, Jobs and co perceive a variety of threats from emerging sectors, including the mobile companies and music pirates.

The filing said: "[Apple] is currently focused on market opportunities related to digital music distribution and related consumer electronic devices, including iPods. The company faces increasing competition from other companies promoting their own digital music products, including music enabled cell phones, distribution services, and free peer-to-peer music services.

"These competitors include both new entrants with different market approaches, such as subscription services models, and also larger companies that may have greater technical, marketing, distribution, and other resources than those of [Apple]."