Apple
APPLE INC (Form: 8-K, Received: 10/19/2009 16:30:37)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

October 19, 2009

Date of Report (date of earliest event reported)

 

 

APPLE INC.

(Exact name of Registrant as specified in its charter)

 

California   000-10030   94-2404110

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification Number)

1 Infinite Loop, Cupertino, CA 95014

(Address of principal executive offices)

(408) 996-1010

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On October 19, 2009, Apple Inc. (“Apple”) issued a press release regarding Apple’s financial results for its fourth fiscal quarter ended September 26, 2009 and a related data sheet. A copy of Apple’s press release is attached hereto as Exhibit 99.1 and a copy of the related data sheet is attached hereto as Exhibit 99.2.

The information contained in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

The following exhibits are furnished herewith:

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. dated October 19, 2009.
99.2    Data sheet issued by Apple Inc. dated October 19, 2009.


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    APPLE INC.
Date: October 19, 2009     By:   /s/ Peter Oppenheimer
       

Peter Oppenheimer

Senior Vice President and

Chief Financial Officer

 


EXHIBIT INDEX

 

Exhibit

Number

  

Description

99.1    Text of press release issued by Apple Inc. dated October 19, 2009.
99.2    Data sheet issued by Apple Inc. dated October 19, 2009.

Exhibit 99.1

Apple Reports Fourth Quarter Results

Most Profitable Quarter Ever; Record Mac and iPhone Sales

CUPERTINO, California—October 19, 2009—Apple ® today announced financial results for its fiscal 2009 fourth quarter ended September 26, 2009. The Company posted revenue of $9.87 billion and a net quarterly profit of $1.67 billion, or $1.82 per diluted share. These results compare to revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share, in the year-ago quarter. Gross margin was 36.6 percent, up from 34.7 percent in the year-ago quarter. International sales accounted for 46 percent of the quarter’s revenue.

In accordance with the subscription accounting treatment required by GAAP, the Company recognizes revenue and cost of goods sold for iPhone™ and Apple TV ® over their estimated economic lives. Adjusting GAAP sales and product costs to eliminate the impact of subscription accounting, the corresponding non-GAAP measures* for the quarter are $12.25 billion of “Adjusted Sales” and $2.85 billion of “Adjusted Net Income.”

Apple sold 3.05 million Macintosh ® computers during the quarter, representing a 17 percent unit increase over the year-ago quarter. The Company sold 10.2 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter. Apple sold 7.4 million iPhones in the quarter, representing seven percent unit growth over the year-ago quarter.

“We are thrilled to have sold more Macs and iPhones than in any previous quarter,” said Steve Jobs, Apple’s CEO. “We’ve got a very strong lineup for the holiday season and some really great new products in the pipeline for 2010.”

“We are delighted with our September quarter and fiscal 2009 results,” said Peter Oppenheimer, Apple’s CFO. “For the full year, we grew revenue by 12 percent and net income by 18 percent in extraordinarily challenging times. Looking ahead to the first fiscal quarter of 2010, we expect revenue in the range of about $11.3 billion to $11.6 billion and we expect diluted earnings per share in the range of about $1.70 to $1.78.”

Apple will provide live streaming of its Q4 2009 financial results conference call utilizing QuickTime ® , Apple’s standards-based technology for live and on-demand audio and video streaming. The live webcast will begin at 2:00 p.m. PDT on October 19, 2009 at www.apple.com/quicktime/qtv/earningsq409/ and will also be available for replay for approximately two weeks thereafter.

*Non-GAAP Financial Measures

During fiscal 2007, the Company began selling iPhone and Apple TV. Because the Company may provide unspecified features and additional software products to iPhone and Apple TV customers in the future free of charge, in accordance with GAAP, specifically FASB ASC 985-605, formerly known as AICPA SOP 97-2, the Company recognizes revenue and cost of goods sold for these products on a straight-line basis over their economic lives, with any loss recognized at the time of sale. Currently, the economic lives of these products are estimated to be 24 months. This accounting treatment, referred to as subscription accounting, results in the deferral of almost all of the revenue and cost of goods sold during the quarter in which the products are sold to the customer. Other costs related to these products, including costs for engineering, sales, marketing and warranty, are expensed as incurred. Further, the costs to develop any future unspecified features and additional software products that may eventually be provided to customers also are expensed as incurred. In contrast, the Company generally recognizes revenue and cost of goods sold for its other products, such as Macs and iPods, at the time of sale, as the Company does not provide future unspecified features or additional software products to those customers free of charge.

In July 2008, the Company began selling iPhone 3G, the second-generation iPhone, and at that time significantly expanded distribution by establishing carrier relationships in over 70 countries. Unit sales of iPhone 3G have been significantly greater than sales of the first-generation iPhone. During the first quarter of iPhone 3G availability ended September 27, 2008, 6.9 million units were sold, exceeding the 6.1 million first-generation iPhone units sold in the prior five quarters combined.


In June 2009, the Company began selling iPhone 3GS, the third-generation iPhone. Unit sales of iPhones continued to be significant in the quarter ended September 26, 2009, with 7.4 million iPhones sold. As a result, the amount of revenue and product cost related to those iPhone sales that the Company deferred for recognition in future periods under subscription accounting was substantial. While the GAAP results provide significant insight into the Company’s operations and financial position, management continues to supplement its analysis of the business using financial measures that look at the total sales, related product costs and resulting income for iPhones and Apple TVs sold to customers during the period. The presentation at the end of this press release includes the following non-GAAP measures: “Adjusted Sales,” “Adjusted Cost of Sales,” “Adjusted Gross Margin,” “Adjusted Operating Margin,” “Adjusted Net Income” and “Adjusted Diluted Earnings per Share.” These financial measures are not consistent with GAAP because they do not reflect the deferral of revenue and product costs for recognition in later periods. The above-mentioned non-GAAP measures are generated by adjusting the related GAAP measures solely to reverse the effect of subscription accounting. The Company uses these financial measures, along with other measures discussed below, to provide additional insight into current operating and business trends not readily apparent from the GAAP results.

Management uses Adjusted Sales to evaluate the Company’s growth rate, revenue mix and performance relative to competitors. Given the impact of iPhone unit sales during the quarter ended September 26, 2009, Adjusted Sales provides a meaningful measurement of the Company’s growth by reflecting amounts generally due to Apple at the time of sale related to products sold within the period. Further, eliminating the effects of deferred revenue (current sales deferred to future periods and prior sales being recognized currently) provides more transparency into the Company’s underlying sales trends. Management uses the non-GAAP measures of “Adjusted Cost of Sales,” “Adjusted Gross Margin” and “Adjusted Operating Margin” to measure the Company’s operating performance based on current period iPhone and Apple TV sales and to facilitate ongoing operating decisions. Additionally, because the Company recognizes engineering, sales, and marketing expenses as incurred, including expenses related to iPhone and Apple TV, management uses Adjusted Sales to evaluate returns on those costs, to manage year-over-year operating expense growth, and to budget future expenses. Furthermore, because they are considered meaningful indicators of current business performance, the non-GAAP measures “Adjusted Sales” and “Adjusted Operating Margin” are metrics that factor into the determination of management compensation beginning in fiscal year 2009. Finally, management uses the non-GAAP measures of “Adjusted Net Income” and “Adjusted Diluted Earnings per Share” to measure the Company’s operating performance based on current period iPhone and Apple TV sales, to facilitate ongoing operating decisions, and compare performance relative to competitors.

Management believes that these non-GAAP financial measures, when taken together with the corresponding consolidated GAAP measures and related segment information, provide incremental insight into the underlying factors and trends affecting both the Company’s performance and its cash generating potential. Management believes these non-GAAP measures increase the transparency of the Company’s current results and enable investors to more fully understand trends in its current and future performance.

Cautions on Use of Non-GAAP Measures

As noted previously, these non-GAAP financial measures are not consistent with GAAP because they do not reflect the deferral of revenue and product costs for recognition in later periods. These non-GAAP financial measures do not adjust for the costs associated with the Company’s intention to provide unspecified new features and software to purchasers of iPhone and Apple TV products. These costs are expensed as incurred under GAAP’s subscription accounting model, and are not adjusted in these non-GAAP financial measures. As such, these non-GAAP financial measures are not intended to reflect in a given period all of the costs of sales made in that period. Rather, the non-GAAP financial measures presented below are intended for the limited purpose of presenting performance measures that include the total sales, related product costs, and resulting income for iPhones and Apple TVs in the period those products are sold to customers.

Management believes investors will benefit from greater transparency in referring to these non-GAAP financial measures when assessing the Company’s operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:

 

 

these non-GAAP financial measures are limited in their usefulness and should be considered only as a supplement to the Company’s GAAP financial measures;

 

 

these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the Company’s GAAP financial measures;

 

 

these non-GAAP financial measures should not be considered to be superior to the Company’s GAAP financial measures; and

 

 

these non-GAAP financial measures were not prepared in accordance with GAAP and investors should not assume that the non-GAAP financial measures presented in this earnings release were prepared under a comprehensive set of rules or principles.

Further, these non-GAAP financial measures may be unique to the Company, as they may be different from non-GAAP financial measures used by other companies. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company’s results to the results of other companies.


A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure or measures appears at the end of this press release.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; the Company’s reliance on the availability of third-party digital content and applications; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the Company’s reliance on sole service providers for iPhone in certain countries; the continued service and availability of key executives and employees; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; potential litigation from the matters investigated by the special committee of the board of directors and the restatement of the Company’s consolidated financial statements; and unfavorable results of other legal proceedings.

More information on potential factors that could affect the Company’s financial results is included from time to time in the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 27, 2008, its Forms 10-Q for the quarters ended December 27, 2008, March 28, 2009 and June 27, 2009, and its Form 10-K for the fiscal year ended September 26, 2009 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.

Press Contact:

Steve Dowling

Apple

dowling@apple.com

(408) 974-1896

Investor Relations Contacts:

Nancy Paxton

Apple

paxton1@apple.com

(408) 974-5420

Joan Hoover

Apple

hoover1@apple.com

(408) 974-4570

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr/), or call Apple’s Media Helpline at (408) 974-2042.

© 2009 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh, iPhone, Apple TV and QuickTime are trademarks of Apple. Other company and product names may be trademarks of their respective owners.


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except share amounts which are reflected in thousands and per share amounts)

 

     Three Months Ended    Twelve Months Ended
     September 26,
2009
   September 27,
2008
   September 26,
2009
   September 27,
2008

Net sales

   $ 9,870    $ 7,895    $ 36,537    $ 32,479

Cost of sales (1)

     6,256      5,156      23,397      21,334
                           

Gross margin

     3,614      2,739      13,140      11,145
                           

Operating expenses:

           

Research and development (1)

     358      298      1,333      1,109

Selling, general and administrative (1)

     1,063      999      4,149      3,761
                           

Total operating expenses

     1,421      1,297      5,482      4,870
                           

Operating income

     2,193      1,442      7,658      6,275

Other income and expense

     45      140      326      620
                           

Income before provision for income taxes

     2,238      1,582      7,984      6,895

Provision for income taxes

     573      446      2,280      2,061
                           

Net income

   $ 1,665    $ 1,136    $ 5,704    $ 4,834
                           

Earnings per common share:

           

Basic

   $ 1.85    $ 1.28    $ 6.39    $ 5.48

Diluted

   $ 1.82    $ 1.26    $ 6.29    $ 5.36

Shares used in computing earnings per share:

           

Basic

     898,032      887,110      893,016      881,592

Diluted

     914,374      904,786      907,005      902,139
(1)  Includes stock-based compensation expense as follows:            

Cost of sales

   $ 29    $ 21    $ 114    $ 80

Research and development

   $ 66    $ 52    $ 258    $ 185

Selling, general and administrative

   $ 85    $ 68    $ 338    $ 251


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share amounts)

 

     September 26,
2009
   September 27,
2008
ASSETS:      

Current assets:

     

Cash and cash equivalents

   $ 5,263    $ 11,875

Short-term marketable securities

     18,201      10,236

Accounts receivable, less allowances of $52 and $47, respectively

     3,361      2,422

Inventories

     455      509

Deferred tax assets

     2,101      1,447

Other current assets

     6,884      5,822
             

Total current assets

     36,265      32,311

Long-term marketable securities

     10,528      2,379

Property, plant and equipment, net

     2,954      2,455

Goodwill

     206      207

Acquired intangible assets, net

     247      285

Other assets

     3,651      1,935
             

Total assets

   $ 53,851    $ 39,572
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:      

Current liabilities:

     

Accounts payable

   $ 5,601    $ 5,520

Accrued expenses

     3,376      3,719

Deferred revenue

     10,305      4,853
             

Total current liabilities

     19,282      14,092

Deferred revenue—non-current

     4,485      3,029

Other non-current liabilities

     2,252      1,421
             

Total liabilities

     26,019      18,542
             

Commitments and contingencies

     

Shareholders’ equity:

     

Common stock, no par value; 1,800,000,000 shares authorized; 899,805,500 and 888,325,973 shares issued and outstanding, respectively

     8,210      7,177

Retained earnings

     19,538      13,845

Accumulated other comprehensive income

     84      8
             

Total shareholders’ equity

     27,832      21,030
             

Total liabilities and shareholders’ equity

   $ 53,851    $ 39,572
             


UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

 

     Twelve Months Ended  
     September 26,
2009
    September 27,
2008
 

Cash and cash equivalents, beginning of the year

   $ 11,875      $ 9,352   
                

Operating Activities:

    

Net income

     5,704        4,834   

Adjustments to reconcile net income to cash generated by operating activities:

    

Depreciation, amortization and accretion

     703        473   

Stock-based compensation expense

     710        516   

Deferred income tax benefit

     (519     (368

Loss on disposition of property, plant and equipment

     26        22   

Changes in operating assets and liabilities:

    

Accounts receivable, net

     (939     (785

Inventories

     54        (163

Other current assets

     (1,050     (1,958

Other assets

     (1,346     (492

Accounts payable

     92        596   

Deferred revenue

     6,908        5,642   

Other liabilities

     (184     1,279   
                

Cash generated by operating activities

     10,159        9,596   
                

Investing Activities:

    

Purchases of marketable securities

     (46,724     (22,965

Proceeds from maturities of marketable securities

     19,790        11,804   

Proceeds from sales of marketable securities

     10,888        4,439   

Purchases of other long-term investments

     (101     (38

Payments made in connection with business acquisitions, net of cash acquired

     —          (220

Payment for acquisition of property, plant and equipment

     (1,144     (1,091

Payment for acquisition of intangible assets

     (69     (108

Other

     (74     (10
                

Cash used in investing activities

     (17,434     (8,189
                

Financing Activities:

    

Proceeds from issuance of common stock

     475        483   

Excess tax benefits from stock-based compensation

     270        757   

Cash used to net share settle equity awards

     (82     (124
                

Cash generated by financing activities

     663        1,116   
                

(Decrease)/Increase in cash and cash equivalents

     (6,612     2,523   
                

Cash and cash equivalents, end of the year

   $ 5,263      $ 11,875   
                

Supplemental cash flow disclosure:

    

Cash paid for income taxes, net

   $ 2,997      $ 1,267   


UNAUDITED CONSOLIDATED SCHEDULE OF DEFERRED REVENUE

(In millions)

 

     September 26,
2009
        June 27,     
2009
   September 27,
2008

Deferred revenue—current:

        

iPhone and Apple TV

   $ 8,519    $ 6,767    $ 3,518

AppleCare

     791      725      599

Other

     995      977      736
                    

Total deferred revenue—current

     10,305      8,469      4,853
                    

Deferred revenue—non-current:

        

iPhone and Apple TV

     3,618      2,860      2,262

AppleCare

     688      653      651

Other

     179      154      116
                    

Total deferred revenue—non-current

     4,485      3,667      3,029
                    

Total deferred revenue

   $ 14,790    $ 12,136    $ 7,882
                    


UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS OF OPERATIONS

(In millions, except share amounts which are reflected in thousands and per share amounts)

 

     Three Months Ended September 26, 2009
     As reported
in accordance
with GAAP
   Non-GAAP
 Adjustments 
      Non-GAAP  

Net sales

   $ 9,870    $ 2,383 (a)    $ 12,253

Cost of sales

   $ 6,256    $ 791 (b)    $ 7,047

Gross margin

   $ 3,614    $ 1,592 (c)    $ 5,206

Operating expenses

   $ 1,421    $ —        $ 1,421

Operating income

   $ 2,193    $ 1,592 (c)    $ 3,785

Net income

   $ 1,665    $ 1,184 (d)    $ 2,849

Earnings per diluted common share

   $ 1.82    $ 1.30 (e)    $ 3.12

Shares used in computing diluted earnings per share

     914,374        914,374

 

     Three Months Ended September 27, 2008
     As reported
in accordance
with GAAP
   Non-GAAP
 Adjustments 
      Non-GAAP  

Net sales

   $ 7,895    $ 3,787 (a)    $ 11,682

Cost of sales

   $ 5,156    $ 1,975 (b)    $ 7,131

Gross margin

   $ 2,739    $ 1,812 (c)    $ 4,551

Operating expenses

   $ 1,297    $ —        $ 1,297

Operating income

   $ 1,442    $ 1,812 (c)    $ 3,254

Net income

   $ 1,136    $ 1,301 (d)    $ 2,437

Earnings per diluted common share

   $ 1.26    $ 1.43 (e)    $ 2.69

Shares used in computing diluted earnings per share

     904,786        904,786

Footnotes:

 

(a) Non-GAAP adjustment to net sales reflect (i) the reversal of the current period’s amortization of deferred revenue derived from iPhone handsets and Apple TV units shipped in current and prior periods and (ii) the inclusion of amounts generally due to Apple at the time of sale related to iPhone handsets and Apple TV units shipped in the current period.

 

(b) Non-GAAP adjustment to cost of sales reflect (i) the reversal of the current period’s amortization of deferred cost related to iPhone handsets and Apple TV units shipped in current and prior periods and (ii) the inclusion of the total cost of iPhone handsets and Apple TV units shipped in the current period. In addition, the non-GAAP adjustment to cost of sales reflects the estimate of the warranty expense in the period when the related product is sold, rather than when the expense is incurred. The non-GAAP adjustment to cost of sales does not reflect the cost of providing unspecified additional software products and upgrades.

 

(c) Non-GAAP adjustments to gross margin and operating income are the difference between non-GAAP adjustments to net sales and non-GAAP adjustments to cost of sales [(a) – (b)].

 

(d) Represents the after-tax effect of the non-GAAP adjustments to gross margin and operating income. The tax effect on the non-GAAP adjustments to gross margin and operating income is estimated by applying the period’s effective tax rate to the non-GAAP adjustments. The tax effect on the non-GAAP adjustments is $408 million and $511 million for the three-month periods ended September 26, 2009 and September 27, 2008, respectively. The non-GAAP adjustment to net income does not reflect any changes to the Company’s other income and expense.

 

(e) Represents the per share impact of the non-GAAP adjustments to net income.

Exhibit 99.2

Apple Inc.

Q4 2009 Unaudited Summary Data

 

     Q3 2009     Q4 2008     Q4 2009     Sequential Change     Year/Year Change  
     CPU
Units K
   Revenue
$M
    CPU
Units K
   Revenue
$M
    CPU
Units K
   Revenue
$M
    CPU Units     Revenue     CPU Units     Revenue  

Operating Segments

                       

Americas

   1,147    $ 3,827       1,121    $ 3,572       1,252    $ 4,297       9   12   12   20

Europe

   626      2,006      611      1,723      761      2,491      22   24   25   45

Japan

   108      416      78      320      79      434      - 27   4   1   36

Retail

   492      1,496      596      1,718      670      1,867      36   25   12   9

Other Segments (1)

   230      592      205      562      291      781      27   32   42   39
                                               

Total Operating Segments

   2,603    $ 8,337      2,611    $ 7,895      3,053    $ 9,870      17   18   17   25
                                               
                       
     Units K    Revenue
$M
    Units K    Revenue
$M
    Units K    Revenue
$M
    Sequential Change     Year/Year Change  
                    Units     Revenue     Units     Revenue  

Product Summary

                       

Desktops (2)

   849    $ 1,129      936    $ 1,363      787    $ 1,086      - 7   - 4   - 16   - 20

Portables (3)

   1,754      2,200      1,675      2,257      2,266      2,866      29   30   35   27
                                               

Subtotal CPUs

   2,603      3,329      2,611      3,620      3,053      3,952      17   19   17   9

iPod

   10,215      1,492      11,052      1,660      10,177      1,563      0   5   - 8   - 6

Other Music Related Products and Services (4)

        958           832           1,018        6     22

iPhone and Related Products and Services (5)

   5,208      1,689      6,892      806      7,367      2,297      41   36   7   185

Peripherals and Other Hardware

        341           428           393        15     - 8

Software, Service and Other Sales

        528           549           647        23     18
                                         

Total Apple

      $ 8,337         $ 7,895         $ 9,870        18     25
                                         

 

(1) Other Segments include Asia Pacific and FileMaker.

 

(2) Includes iMac, Mac mini, Mac Pro and Xserve product lines.

 

(3) Includes MacBook, MacBook Air and MacBook Pro product lines.

 

(4) Consists of iTunes Store sales, iPod services, and Apple-branded and third-party iPod accessories.

 

(5) Units consist of iPhone handset sales; Revenue is derived from handset sales, carrier agreements, and Apple-branded and third-party iPhone accessories.

K = Units in thousands

$M = Amounts in millions