Apple today filed its annual report (SEC form 10-K) with the Securities and Exchange Commission. In the report, Apple discusses its business model and some operational specifics, and makes particular reference to the digital music market. “While the Company is widely recognized as an innovator in the personal computer market as well as a leader in the emerging market for distribution of digital music, these are highly competitive markets that are subject to aggressive pricing and increased competition,” notes Apple. “In order to remain competitive, the Company believes that increased investment in research and development is necessary in order to maintain and extend its position in the markets where it competes.” Other highlights from the report include: