Apple (AAPL)

Americas

During 2009, net sales in the Americas segment increased $2.4 billion or 15% compared to 2008. The increase in net sales during 2009 was attributable to the significant year-over-year increase in iPhone revenue, higher sales of third-party digital content and applications from the iTunes Store, and increased sales of Mac portable systems, which were partially offset by a decrease in sales of Mac desktop systems and iPods. Americas Mac net sales decreased 6% due primarily to lower average selling prices, while Mac unit sales increased by 4% on a year-over-year basis. The increase in Mac unit sales was due primarily to strong demand for the MacBook Pro, which was updated in June 2009 and October 2008. The Americas segment represented approximately 44% of the Company’s total net sales in both 2009 and 2008.

During 2008, net sales in the Americas segment increased $4.5 billion or 38% compared to 2007. The primary drivers of this growth were the significant year-over-year increase in sales of iPhone, iPod touch, Mac portable systems, and content from the iTunes Store. The Company began shipping iPhone in June 2007 and the growth in iPhone sales in 2008 resulted from a full year of iPhone shipments as well as stronger demand for iPhones in the fourth quarter of 2008. The increase in Mac net sales of $1.4 billion or 31% and Mac unit sales of 961 million or 32% is attributable to growth in sales of all of the Mac portable systems, particularly the MacBook, and higher sales of the iMac. Net sales of iPods increased due to a shift in product mix toward higher priced iPods, particularly the iPod touch, which was upgraded in June 2008. In 2008, the Americas segment represented 44% of the Company’s total net sales as compared to 48% in 2007.

Americas

During 2009, net sales in the Americas segment increased $1.6 billion or 11% compared to 2008. The increase in net sales during 2009 was attributable to the significant year-over-year increase in iPhone revenue, higher sales of third-party digital content and applications from the iTunes Store, and increased sales of Mac portable systems, which were partially offset by a decrease in sales of Mac desktop systems and iPods. Americas Mac net sales decreased 6% due primarily to lower average selling prices, while Mac unit sales increased by 4% on a year-over-year basis. The increase in Mac unit sales was due primarily to strong demand for the MacBook Pro, which was updated in June 2009 and October 2008. The Americas segment represented approximately 44% and 45% of the Company’s total net sales in 2009 and 2008, respectively.

During 2008, net sales in the Americas segment increased $3.0 billion or 26% compared to 2007. The primary drivers of this growth were the significant year-over-year increase in sales of the iPod touch, Mac portable systems, content from the iTunes Store, and iPhone. The Company began shipping iPhone in June 2007 and the growth in iPhone sales in 2008 resulted from a full year of iPhone shipments as well as stronger demand for iPhones in the fourth quarter of 2008. The increase in Mac net sales of $1.3 billion or 30% and Mac unit sales of 961 million or 32% is attributable to growth in sales of all of the Mac portable systems, particularly the MacBook, and higher sales of the iMac. Net sales of iPods increased due to a shift in product mix toward higher priced iPods, particularly the iPod touch, which was upgraded in June 2008. In 2008, the Americas segment represented 45% of the Company’s total net sales as compared to 48% in the same period of 2007.

Americas

Net sales in the Americas segment during the second quarter of 2009 increased $249 million or 8% compared to the second quarter of 2008, while Americas Mac unit sales decreased 8% year-over-year. The increase in net sales during the second quarter of 2009 was attributable to increased iPhone revenue and higher sales of third-party digital content and applications from the iTunes Store, which were offset partially by a decrease in sales of iPods and Mac portable and desktop systems. Sales of Mac portable and desktop systems decreased due largely to lower sales of MacBook Pro, MacBook Air, and Mac Pro. The Americas segment represented 43% and 44% of the Company’s total net sales in the second quarters of 2009 and 2008, respectively.

During the first six months of 2009, net sales in the Americas segment increased $452 million or 6% compared to the same period in 2008, while Americas Mac unit sales where flat on a year-over-year basis. The increase in net sales during the first six months of 2009 was attributable primarily to the significant year-over-year increase in iPhone revenue and higher sales of third-party digital content and applications from the iTunes Store, which was partially offset by a decrease in sales of iPods, Mac portable and desktop systems, and lower software sales. The Americas segment represented approximately 44% of the Company’s total net sales for the first six months of both 2009 and 2008.

Americas

Net sales in the Americas segment during the first quarter of 2009 increased $203 million or 5% over the first quarter of 2008, while Americas Mac unit sales increased 8% year-over-year. The increase in net sales during the first quarter of 2009 was attributable to higher sales of iPhone, Mac portable systems, and sales from the iTunes Store, which were partially offset by a decrease in sales of iPods, iMac, and software, as well as the weakening of the Canadian dollar against the U.S. dollar. Sales of Mac portable products increased due primarily to strong demand for MacBook and MacBook Pro, both of which were updated in October 2008. The Americas segment represented 44% and 45% of the Company’s total net sales in the first quarters of 2009 and 2008, respectively.

Americas

During 2008, net sales in the Americas segment increased $3.0 billion or 26% compared to 2007. The primary drivers of this growth were the significant year-over-year increase in sales of the iPod touch, Mac portable systems, content from the iTunes Store, and iPhone. The Company began shipping iPhone in June 2007 and the growth in iPhone sales in 2008 resulted from a full year of iPhone shipments. The increase in Mac net sales of $1.3 billion or 30% and Mac unit sales of 961 million or 32% is attributable to growth in all of the Mac portable systems, particularly the MacBook, and higher sales of the iMac. Net sales of iPods increased due to a shift in product mix toward higher priced iPods, particularly the iPod touch, which was upgraded in June 2008. In 2008, the Americas segment represented 45% of the Company’s total net sales as compared to 48% in the same period of 2007. During 2008, U.S. education channel net sales and Mac unit sales increased by 14% and 19%, respectively, compared to 2007. Net sales from the higher education market grew 15% during 2008 compared to 2007, while net sales in the K-12 market grew 12% during the same period.

During 2007, net sales in the Americas segment increased $2.2 billion, or 23%, compared to 2006. The main sources of this growth were Mac portable products, iMacs, iPods, and the sales of third-party content from the iTunes Store. Sales of Mac portable products increased due to the popularity of the MacBook, introduced in May 2006 and updated in May 2007, as well as the MacBook Pro, introduced in January 2006 and updated in June 2007. Sales of iMacs grew due to a shift in desktop product mix away from the Mac mini and discontinued eMac as well as the strong reception of the new iMac introduced in August 2007. Sales of iPods grew due to increased demand for the iPod nano and iPod shuffle and the introduction of the iPod touch in September 2007. During 2007, the Americas segment represented 48% of the Company’s total net sales as compared to 49% in the same period of 2006. During 2007, U.S. education channel net sales and Mac unit sales increased by 14% and 18%, respectively, compared to 2006. Net sales from the higher education market grew 17% during 2007 compared to 2006, while net sales in the K-12 market grew 10% during the same period.

Americas

During
2008, net sales in the Americas segment increased $3.0 billion or 26% compared to 2007. The primary drivers of this growth were the significant year-over-year increase in sales of the iPod touch, Mac portable systems, content from the iTunes Store,
and iPhone. The Company began shipping iPhone in June 2007 and the growth in iPhone sales in 2008 resulted from a full year of iPhone shipments. The increase in Mac net sales of $1.3 billion or 30% and Mac unit sales of 961 million or 32% is
attributable to growth in all of the Mac portable systems, particularly the MacBook, and higher sales of the iMac. Net sales of iPods increased due to a shift in product mix toward higher priced iPods, particularly the iPod touch, which was upgraded
in June 2008. In 2008, the Americas segment represented 45% of the Company’s total net sales as compared to 48% in the same period of 2007. During 2008, U.S. education channel net sales and Mac unit sales increased by 14% and 19%, respectively,
compared to 2007. Net sales from the higher education market grew 15% during 2008 compared to 2007, while net sales in the K-12 market grew 12% during the same period.

FACE="Times New Roman" SIZE="2">During 2007, net sales in the Americas segment increased $2.2 billion, or 23%, compared to 2006. The main sources of this growth were Mac portable products, iMacs, iPods, and the sales of third-party content from the
iTunes Store. Sales of Mac portable products increased due to the popularity of the MacBook, introduced in May 2006 and updated in May 2007, as well as the MacBook Pro, introduced in January 2006 and updated in June 2007. Sales of iMacs grew due to
a shift in desktop product mix away from the Mac mini and discontinued eMac as well as the strong reception of the new iMac introduced in August 2007. Sales of iPods grew due to increased demand for the iPod nano and iPod shuffle and the
introduction of the iPod touch in September 2007. During 2007, the Americas segment represented 48% of the Company’s total net sales as compared to 49% in the same period of 2006. During 2007, U.S. education channel net sales and Mac unit sales
increased by 14% and 18%, respectively, compared to 2006. Net sales from the higher education market grew 17% during 2007 compared to 2006, while net sales in the K-12 market grew 10% during the same period.

Americas

Net sales in the Americas segment during the third quarter of 2008 increased $755 million or 28%, compared to the same period in 2007, while Americas Mac unit sales increased 38% year-over-year. The increase in net sales during the third quarter of 2008 was attributable primarily to higher sales of Mac portable systems, iMac, sales from the iTunes Store, and iPhone. Sales of Mac portable products increased largely due to strong demand for MacBook. Net sales and unit sales of iPods increased during the third quarter of 2008 as compared to the third quarter of 2007 as a result of strong demand for iPod touch, which was introduced at the high end of the iPod product line in September 2007. During the third quarters of 2008 and 2007, the Americas segment represented 46% and 50%, respectively, of the Company’s total net sales.

During the first nine months of 2008, net sales in the Americas segment increased $2.3 billion or 27% compared to the same period in 2007, while Americas Mac unit sales increased 39%. The main sources of this growth were the significant year-over-year increase in sales of Mac portable systems, iMac, content from the iTunes Store, and iPhone. The Company believes that the growth in iTunes Store sales was the result of heightened consumer interest in downloading third-party digital content and the expansion of third-party audio and video content available for sale and rent via the iTunes Store. During the first nine months of 2008, net sales of iPods increased due to a higher average selling price compared to the same period in 2007. The higher average selling price was due to strong demand for the higher priced iPod touch. The Americas segment represented approximately 45% and 49% of the Company’s total net sales for the first nine months of 2008 and 2007, respectively.

Americas

Net sales in the Americas segment during the second quarter of 2008 increased $801 million or 32%, compared to the same period in 2007, while Americas Mac unit sales increased 46% year-over-year. The increase in net sales during the second quarter of 2008 was attributable primarily to higher sales of Mac portable and desktop systems, iPhone and sales from the iTunes Store. The increase in net sales of Mac portable systems is attributable primarily to sales of the new MacBook Air, which was introduced in January 2008. Net sales and unit sales of iPods remained relatively flat as compared to the second quarter of 2007. During the second quarters of 2008 and 2007, the Americas segment represented 44% and 47%, respectively, of the Company’s total net sales.

During the first six months of 2008, net sales in the Americas segment increased $1.6 billion or 26% compared to the same period in 2007, while Americas Mac unit sales increased 40% during the same period in 2007. The increase in net sales during the first six months of 2008 was attributable primarily to the significant year-over-year increase in sales of all Mac portable systems, the iMac, iPhone and content from the iTunes Store. During the first six months of 2008, unit sales of iPods remained relatively flat while net sales of iPods increased due to higher average selling prices as compared to the same period in 2007. The higher average selling prices were due to strong demand for the iPod touch, which was introduced at the high end of the iPod product line in September 2007. The Americas segment represented approximately 44% and 48% of the Company’s total net sales for the first six months of 2008 and 2007, respectively.

Americas

Net sales in the Americas segment during the first quarter of 2008 increased $777 million or 22% compared to the first quarter of 2007, while Mac unit sales increased 35% year-over-year. The increase in net sales is primarily attributable to higher sales of iMacs and Mac portable systems, Mac OS X Leopard and other software, and sales from the iTunes Store. During the first quarters of 2008 and 2007, the Americas segment represented 45% and 49%, respectively, of the Company’s total net sales.

Americas

During 2007, net sales in the Americas segment increased $2.2 billion, or 23%, compared to 2006. The main sources of this growth were Mac portable products, iMacs, iPods, and the sales of third-party content from the iTunes Store. Sales of Mac portable products increased due to the popularity of the MacBook, introduced in May 2006 and updated in May 2007, as well as the MacBook Pro, introduced in January 2006 and updated in June 2007. Sales of iMacs grew due to a shift in desktop product mix away from the Mac mini and discontinued eMac as well as the strong reception of the new iMac introduced in August 2007. Sales of iPods grew due to increased demand for the iPod nano and iPod shuffle and the introduction of the iPod touch in September 2007. The Company believes that the growth in iTunes Store sales was the result of heightened consumer interest in downloading digital content and the expansion of third-party audio and video content available for sale via the iTunes Store. During 2007, the Americas segment represented 48% of the Company's total net sales as compared to 49% in the same period of 2006. During 2007, U.S. education channel net sales and Mac unit sales increased by 14% and 18%, respectively, compared to 2006. Net sales from the higher education market grew 17% during 2007 compared to 2006, while net sales in the K-12 market grew 10% during the same period.

During 2006, net sales in the Americas segment increased $2.8 billion, or 41%, compared to 2005. The primary contributors to this increase were iPods, other music related products and services, Mac portable systems, and APP. Sales of iPods increased primarily due to the introduction of the updated iPod with video-playing capabilities in October 2005 (now referred to as iPod classic) and the iPod nano during September 2005. The increase in other music related products and services was due to increases in sales of Apple-branded and third-party iPod accessories and sales from the iTunes Store. The increase in sales of Mac portable systems in the Americas was due to strong sales of the MacBook and MacBook Pro during 2006. The overall increase in net sales was partially offset by a decline in net sales of desktops, displays, and Mac OS X. The decrease in desktop products and displays net sales reflects the overall shift in product mix toward portable Mac systems. Mac OS X sales decreased from 2005 since the Company had not released a new version of Mac OS X since Tiger began shipping in April 2005. During 2006, the Americas segment represented 49% of the Company's total net sales as compared to 48% in the same period of 2005.

Americas

During 2007, net sales in the Americas segment increased $2.2 billion, or 23%, compared to 2006. The main sources of this growth were Mac portable products, iMacs,
iPods, and the sales of third-party content from the iTunes Store. Sales of Mac portable products increased due to the popularity of the MacBook, introduced in May 2006 and updated in
May 2007, as well as the MacBook Pro, introduced in January 2006 and updated in June 2007. Sales of iMacs grew due to a shift in desktop product mix away from the Mac mini and
discontinued eMac as well as the strong reception of the new iMac introduced in August 2007. Sales of iPods grew due to increased demand for the iPod nano and iPod shuffle and the introduction
of the iPod touch in September 2007. The Company believes that the growth in iTunes Store sales was the result of heightened consumer interest in downloading digital content and the expansion
of third-party audio and video content available for sale via the iTunes Store. During 2007, the Americas segment represented 48% of the Company's total net sales as compared to 49% in the same period
of 2006. During 2007, U.S. education channel net sales and Mac unit sales increased by 14% and 18%, respectively, compared to 2006. Net sales from the higher education market grew 17% during 2007
compared to 2006, while net sales in the K-12 market grew 10% during the same period.

During
2006, net sales in the Americas segment increased $2.8 billion, or 41%, compared to 2005. The primary contributors to this increase were iPods, other music related products and services,
Mac portable systems, and APP. Sales of iPods increased primarily due to the introduction of the updated iPod with video-playing capabilities in October 2005 (now referred to as iPod classic)
and the iPod nano during September 2005. The increase in other music related products and services was due to increases in sales of Apple-branded and third-party iPod accessories and sales from
the iTunes Store. The
increase in sales of Mac portable systems in the Americas was due to strong sales of the MacBook and MacBook Pro during 2006. The overall increase in net sales was partially offset by a decline in net
sales of desktops, displays, and Mac OS X. The decrease in desktop products and displays net sales reflects the overall shift in product mix toward portable Mac systems. Mac OS X sales decreased from
2005 since the Company had not released a new version of Mac OS X since Tiger began shipping in April 2005. During 2006, the Americas segment represented 49% of the Company's total net sales as
compared to 48% in the same period of 2005.

Americas

Net sales in the Americas segment during the third quarter of 2007 increased $467 million or 21% and Macintosh unit sales increased by 28% compared to the same period in 2006. The increase in net sales during the third quarter of 2007 was primarily due to an increase in sales of Macintosh portable and desktop systems as well as content from the iTunes Store. During the third quarter of 2007, the Americas segment represented approximately 50% of the Company’s total net sales, relatively unchanged from the same period in 2006.

For the first nine months of 2007, net sales in the Americas segment increased $1.6 billion or 23% compared to the same period in 2006, while Americas Macintosh unit sales increased 24% over the same period in 2006. The increase in net sales during the first nine months of 2007 was primarily attributable to the year-over-year increase in sales of the Company’s portable and desktop systems, iPods and content from the iTunes Store. The Americas segment represented approximately 49% of the Company’s total net sales for both the first nine months of 2007 and 2006, respectively.

Americas

Net sales in the Americas segment during the second quarter of 2007 increased $325 million or 15%, compared to the same period in 2006, while Americas Macintosh unit sales increased by 22% during this same period in 2006. The increase in net sales during the second quarter of 2007 was due to an increase in sales of portable systems and content from the iTunes Store. Net sales of desktop systems and iPods remained relatively flat as compared to the second quarter of 2006. The increase in net sales of portable products included increased sales of both MacBooks and MacBook Pros. During the second quarter of 2007, the Americas segment represented approximately 46% of the Company’s total net sales as compared to 49% in the same period of 2006.

For the first six months of 2007, net sales in the Americas segment increased $1.1 billion or 23% compared to the same period in 2006, while Americas Macintosh unit sales increased 22% during the same period in 2006. The increase in net sales during the first six months of 2007 was primarily attributable to the significant year-over-year increase in sales of portable systems, iPods, and content from the iTunes Store. Net sales of desktop systems remained relatively flat as compared to the same period in 2006. The increase in net sales of iPods was due to strong results during the first quarter holiday season from an update to the iPod product family announced in September 2006, channel development programs, and well-supplied channel distribution. The Americas segment represented approximately 48% of the Company’s total net sales for both the first six months of 2007 and 2006.

Americas

Net sales in the Americas segment during the first quarter of 2007 increased $798 million or 30% compared to the first quarter of 2006, while Americas Macintosh unit sales increased 21% year-over-year. The increase in net sales during the first quarter of 2007 was primarily attributable to the significant year-over-year increase in sales of portable systems, iPods, and sales from the iTunes Store, while net sales of desktop systems remained relatively flat as compared to the first quarter of 2006. The increase in net sales of iPods was driven primarily by an update to the iPod product family announced in September 2006, channel development programs and well-supplied channel distribution. During the first quarters of 2007 and 2006, the Americas segment represented 49% and 47%, respectively, of the Company’s total net sales.

Americas

During 2006, net sales in the Americas segment increased $2.7 billion, or 41%, compared to 2005. The main factors for this increase were significant increases in net sales of iPods, other music related products and services, Macintosh portable systems, and APP. Sales of iPods increased primarily due to the introduction of the updated iPod with video-playing capabilities in October 2005 and the iPod nano during September 2005. The increase in other music related products and services was due to increases in sales of Apple-branded and third-party iPod accessories and sales from the iTunes Store. The increase in sales of Macintosh portable systems in the Americas was due to strong sales of the Intel-based MacBook and MacBook Pro during 2006. The overall increase in net sales was partially offset by a decline in net sales of desktops, displays, and Mac OS X. The decrease in desktop products and displays net sales reflects the overall shift in product mix toward portable Macintosh systems. Mac OS X sales decreased from 2005 since the Company has not released a new version of Mac OS X since Tiger began shipping in April 2005. During 2006, the Americas segment represented approximately 48% of the Company’s total net sales as compared to 47% in the same period of 2005. During 2006, U.S. education channel net sales and Macintosh unit sales increased by 13% and 11%, respectively, compared to 2005. Net sales from the higher education market grew 22% during 2006 compared to 2005 due to strong sales of Macintosh portable products and iPods. Net sales were relatively flat for K-12 due to continued budget constraints.

During 2005, net sales in the Americas segment grew 64% or $2.6 billion compared to 2004. The increase in net sales during 2005 was primarily attributable to the significant year-over-year increase in iPod sales, sales of other music related products and services, and strong sales of desktop and portable Macintosh systems. This increase was partially offset by a shift in sales to the Retail segment, which had 117 stores in the U.S. and Canada as of the end of 2005. Macintosh unit sales also increased by 30% in 2005 compared to 2004, driven primarily by strong sales of desktop systems largely attributable to strong sales from the updated iMac, which began shipping in September 2004, and the Mac mini, which was introduced in January 2005. During 2005 and 2004, the Americas segment represented approximately 47% and 49%, respectively, of the Company’s total net sales and represented approximately 48% and 51%, respectively, of total Macintosh unit sales. The Company experienced an increase in both U.S. education channel net sales and unit sales of 21% for 2005 compared to 2004. Strength in higher education sales related primarily to strong iMac and portable system shipments. This strength drove year-over-year growth in net sales of 32% for the higher education channel during 2005. Despite challenges in the K-12 market from continued budget constraints and competitive pressures, the Company’s K-12 net sales grew year-over-year by 11% during 2005 due to increased iBook sales and 1:1 education sales.

Americas

During 2006, net sales in the Americas segment
increased $2.7 billion, or 41%, compared to 2005. The main factors for this
increase were significant increases in net sales of iPods, other music related
products and services, Macintosh portable systems, and APP. Sales of iPods
increased primarily due to the introduction of the updated iPod with
video-playing capabilities in October 2005 and the iPod nano during September 2005.
The increase in other music related products and services was due to increases
in sales of Apple-branded and third-party iPod accessories and sales from the
iTunes Store. The increase in sales of Macintosh portable systems in the
Americas was due to strong sales of the Intel-based MacBook and MacBook Pro
during 2006. The overall increase in net sales was partially offset by a
decline in net sales of desktops, displays, and Mac OS X. The decrease in
desktop products and displays net sales reflects the overall shift in product
mix toward portable Macintosh systems. Mac OS X sales decreased from 2005 since
the Company has not released a new version of Mac OS X since Tiger began
shipping in April 2005. During 2006, the Americas segment represented
approximately 48% of the Company’s total net sales as compared to 47% in the
same period of 2005. During 2006, U.S. education channel net sales and
Macintosh unit sales increased by 13% and 11%, respectively, compared to 2005.
Net sales from the higher education market grew 22% during 2006 compared to
2005 due to strong sales of Macintosh portable products and iPods. Net sales
were relatively flat for K-12 due to continued budget constraints.

During 2005, net sales in
the Americas segment grew 64% or $2.6 billion compared to 2004. The increase in
net sales during 2005 was primarily attributable to the significant
year-over-year increase in iPod sales, sales of other music related products
and services, and strong sales of desktop and portable Macintosh systems. This
increase was partially offset by a shift in sales to the Retail segment, which
had 117 stores in the U.S. and Canada as of the end of 2005. Macintosh unit
sales also increased by 30% in 2005 compared to 2004, driven primarily by
strong sales of desktop systems largely attributable to strong sales from the
updated iMac, which began shipping in September 2004, and the Mac mini,
which was introduced in January 2005. During 2005 and 2004, the Americas
segment represented approximately 47% and 49%, respectively, of the Company’s
total net sales and represented approximately 48% and 51%, respectively, of
total Macintosh unit sales. The Company experienced an increase in both U.S.
education channel net sales and unit sales of 21% for 2005 compared to 2004.
Strength in higher education sales related primarily to strong iMac and
portable system shipments. This strength drove year-over-year growth in net
sales of 32% for the higher education channel during 2005. Despite challenges
in the K-12 market from continued budget constraints and competitive
pressures, the Company’s K-12 net sales grew year-over-year by 11% during
2005 due to increased iBook sales and 1:1 education sales.

Americas

Net sales in the Americas segment during the third quarter of 2006 increased $449 million or 26% compared to the same quarter in 2005.  The increase in net sales during the third quarter was primarily attributable to strong consumer demand for the MacBook and MacBook Pro, and significant growth in iPod sales, sales of other music related products and services, and sales of APP.  Strong sales of iPods during the third quarter of 2006 were mainly due to high demand for the iPod nano and fifth generation iPod and expansion of third-party products available for the iPod. The Americas segment also experienced an increase in sales from the iTunes® Music Store due to additional content added in 2006 such as music videos, television shows, and short films.  The increase in net sales was partially offset by a decrease in net sales of desktops, Mac OS X, and displays.  During the third quarter of 2006, the Americas segment represented approximately 50% of the Company’s total net sales as compared to 49% in the same period of 2005.  U.S. education channel net sales and Macintosh unit sales both increased by 11% during the third quarter of 2006 compared to the same period in 2005.  Net sales from the higher education market grew 19% in the third quarter of 2006 compared to the same period in 2005 largely due to strong sales of Macintosh portable products and iPods, while net sales increased by 4% for K-12 year-over-year.

For the first nine months of 2006, net sales in the Americas segment increased $2.2 billion, or 45%, compared to the same period in 2005. The main factors for this increase were significant year-over-year increases in net sales of iPods, other music related products and services, portable Macintosh systems, APP, and Apple-branded software. This increase in net sales was partially offset by a decline in net sales of desktops and displays.  During the first nine months of 2006, the Americas segment represented approximately 48% of the Company’s total net sales as compared to 47% in the same period of 2005.  During the first nine months of 2006, U.S. education channel net sales and Macintosh unit sales increased by 11% and 4%, respectively, compared to the same period in 2005. Net sales from the higher education market grew 17% in the first nine months of 2006 compared to the same period in 2005 due to strong sales of Macintosh portable products and iPods, while net sales were relatively flat for K-12.

Americas

Net sales in the Americas segment during the second quarter of 2006 increased $679 million or 47% compared to the same quarter in 2005, while Macintosh unit sales increased 4% year-over-year. The increase in net sales during the second quarter was primarily attributable to the significant growth in iPod sales, sales of other music related products and services, sales of desktop and portable Macintosh systems, and sales of APP. During the second quarter of 2006, the Americas segment represented approximately 49% of the Company’s total net sales as compared to 44% in the same period of 2005.

For the first six months of 2006, net sales in the Americas segment increased $1.7 billion, or 57%, compared to the same period in 2005. The main driving factors for this increase were significant year-over-year increases in net sales of iPods, other music related products and services, portable Macintosh systems, and third-party software. This increase in net sales was partially offset by a decrease in desktop net sales. During the first six months of 2006, the Americas segment represented approximately 48% of the Company’s total net sales as compared to 46% in the same period of 2005.

Americas

Net sales in the Americas segment during the first quarter of 2006 increased $1.1 billion or 65% compared to the first quarter of 2005, while Macintosh unit sales increased 8% year-over-year. The increase in net sales during the first quarter of 2006 was primarily attributable to the significant year-over-year increase in iPod sales, sales of other music related products and services, sales of portable Macintosh systems, and sales of software, service, and other sales.  These increases were partially offset by a 18% decrease in desktop net sales year-over-year.  During both the first quarters of 2006 and 2005, the Americas segment represented approximately 47% of the Company’s total net sales.  The Company experienced a year-over-year increase in its U.S. education channel net sales of 16% compared to the first quarter of 2005 due to strong iPod sales, as well as increases in Macintosh portable products and Apple-branded software sales.

Americas

During 2005, net sales in the Americas segment grew 64% or $2.6 billion compared to 2004. The increase in net sales during 2005 was primarily attributable to the significant year-over-year increase in iPod sales, sales of other music related products and services, and strong sales of desktop and portable Macintosh systems. This increase was partially offset by a shift in sales to the Retail segment, which had 117 stores in the U.S. and Canada as of the end of 2005. Macintosh unit sales also increased by 30% in 2005 compared to 2004, driven primarily by strong sales of desktop systems largely attributable to strong sales from the new iMac, which began shipping in September 2004, and the Mac mini, which was introduced in January 2005. During 2005 and 2004, the Americas segment represented approximately 47% and 49%, respectively, of the Company’s total net sales and represented approximately 48% and 51%, respectively, of total Macintosh unit sales. As noted above, the Company experienced an increase in both U.S. education channel net sales and unit sales of 21% for 2005 compared to 2004. Strength in higher education sales related primarily to strong iMac shipments, portable system shipments, and online sales. This strength drove year-over-year growth in net sales of 32% for the higher education channel during 2005. Despite challenges in the K-12 market from continued budget constraints and competitive pressures, the Company’s K-12 net sales grew year-over-year by 11% during 2005 due to increased iBook sales and 1:1 education sales.

During 2004, net sales in the Americas segment grew 26% or $838 million compared to 2003. The increase in net sales during 2004 was primarily attributable to the significant year-over-year increase in iPod sales as well as strong sales of peripherals, software, and services. This increase was partially offset by a shift in sales to the Retail segment, which had 84 stores in the U.S. as of the end of 2004. Macintosh unit sales also increased by 4% in 2004 compared to 2003, driven primarily by strong sales of portable and Power Macintosh systems, partially offset by weakness in iMac sales. During 2004 and 2003, the Americas segment represented approximately 49% and 51%, respectively, of the Company’s total net sales and represented approximately 51% and 54%, respectively, of total Macintosh unit sales. The Company experienced an increase in U.S. education channel net sales of 19% for 2004 compared to 2003. Strong U.S. education net sales for 2004 related primarily to strength in higher education net sales that resulted from a successful back-to-school selling season with strong demand for the Company’s portables. This strength drove year-over-year growth in net sales of 40% for the higher education channel during 2004. The Company’s K-12 net sales grew year-over-year by 3% during 2004, despite the challenges in the K-12 market from continued budget constraints and increased competition.

Americas

During 2005, net sales in the Americas segment grew
64% or $2.6 billion compared to 2004. The increase in net sales during 2005 was
primarily attributable to the significant year-over-year increase in iPod
sales, sales of other music related products and services, and strong sales of
desktop and portable Macintosh systems. This increase was partially offset by a
shift in sales to the Retail segment, which had 117 stores in the U.S. and
Canada as of the end of 2005. Macintosh unit sales also increased by 30% in
2005 compared to 2004, driven primarily by strong sales of desktop systems
largely attributable to strong sales from the new iMac, which began shipping in
September 2004, and the Mac mini, which was introduced in January 2005.
During 2005 and 2004, the Americas segment represented approximately 47% and
49%, respectively, of the Company’s total net sales and represented
approximately 48% and 51%, respectively, of total Macintosh unit sales. As
noted above, the Company experienced an increase in both U.S. education channel
net sales and unit sales of 21% for 2005 compared to 2004. Strength in higher
education sales related primarily to strong iMac shipments, portable system
shipments, and online sales. This strength drove year-over-year growth in net
sales of 32% for the higher education channel during 2005. Despite challenges
in the K-12 market from continued budget constraints and competitive
pressures, the Company’s K-12 net sales grew year-over-year by 11% during
2005 due to increased iBook sales and 1:1 education sales.

During 2004, net sales in
the Americas segment grew 26% or $838 million compared to 2003. The increase in
net sales during 2004 was primarily attributable to the significant
year-over-year increase in iPod sales as well as strong sales of peripherals,
software, and services. This increase was partially offset by a shift in sales
to the Retail segment, which had 84 stores in the U.S. as of the end of 2004.
Macintosh unit sales also increased by 4% in 2004 compared to 2003, driven primarily
by strong sales of portable and Power Macintosh systems, partially offset by
weakness in iMac sales. During 2004 and 2003, the Americas segment represented
approximately 49% and 51%, respectively, of the Company’s total net sales and
represented approximately 51% and 54%, respectively, of total Macintosh unit
sales. The Company experienced an increase in U.S. education channel net sales
of 19% for 2004 compared to 2003. Strong U.S. education net sales for 2004
related primarily to strength in higher education net sales that resulted from
a successful back-to-school selling season with strong demand for the Company’s
portables. This strength drove year-over-year growth in net sales of 40% for
the higher education channel during 2004. The Company’s K-12 net sales
grew year-over-year by 3% during 2004, despite the challenges in the K-12
market from continued budget constraints and increased competition.

Americas

Net sales in the Americas segment grew 71% or $721 million in the third quarter of 2005 compared with the same quarter in 2004.  For the first nine months of 2005, net sales grew $1.996 billion, a 71% increase, compared to the same period of 2004. The increases in net sales for the third quarter and first nine months of 2005 were primarily attributable to the significant year-over-year increase in iPod sales, sales of other music products and strong sales of the desktop products. Software sales for the quarter and nine months ended June 25, 2005 were also strong resulting from the third quarter release of Mac OS X Tiger.  For the three and nine month periods ended June 25, 2005, Macintosh unit sales in the Americas segment increased by 26% and 28%, respectively, as compared to the same period in 2004.

As noted above, the Company experienced an increase in U.S. education channel net sales of 16% and 20% for the third quarter and first nine months of 2005, respectively, compared to the same periods in the prior year. This increase in U.S. education net sales relates primarily to strength in higher education net sales that drove year-over-year growth of 34% for both the three and nine months periods ended June 25, 2005.  Strength in higher education sales related primarily to strong desktop and portable shipments, the Mac OS X Tiger launch and record iPod sales.  The Company’s K-12 net sales increased by 3% and 7% for the third quarter and first nine months of 2005, respectively, compared with the same periods in the prior year.  The Company believes the K-12 market continues to be subject to budgetary constraints and competitive pressures, which have limited year-over-year growth in net sales.

Americas

Net sales in the Americas segment grew 64% or $562 million in the second quarter of 2005 compared with the same quarter in 2004.  For the first six months of 2005, net sales grew $1.275 billion, a 71% increase, compared to the same period of 2004. The increase in net sales for the second quarter and first half of 2005 was primarily attributable to the significant year-over-year increase in iPod sales, sales of other music products, and strong sales of the Company’s consumer–oriented iMac and iBook products, partially offset by lower Power Macintosh sales.  For the

29

Americas

Net sales in the Americas segment during the first quarter of 2005 increased $713 million or 77% compared to the same quarter in 2004, while unit sales increased 26% year-over year.  This increase was driven primarily by increased demand of the iPod as well as strong sales of the Company’s consumer-oriented iMac and iBook products. During the first quarters of 2005 and 2004, the Americas segment represented approximately 47% and 46%, respectively, of the Company’s total net sales. As noted above, the Company experienced a year-over-year increase in its U.S. education channel net sales of 20% and related CPU unit growth of 11% in the first quarter of 2005 compared to the same period in the prior year. Year-over-year increases in higher education and K-12 net sales of 25% and 15%, respectively, were due in part to strong demand for the Company’s iMac G5 and iBooks.

27

Americas

During fiscal 2004, net sales in the Americas segment grew 26% or $838 million compared to fiscal 2003. The increase in net sales during 2004 was primarily attributable to the significant year-over-year increase in iPod sales as well as strong sales of peripherals, software, and services. This increase was partially offset by a shift in sales to the Retail segment, which had 84 stores in the U.S. as of the end of fiscal 2004. Macintosh unit sales also increased by 4% in fiscal 2004 compared to 2003, driven primarily by strong sales of portable and Power Macintosh systems, partially offset by continued weakness in iMac sales. During 2004 and 2003, the Americas segment represented approximately 49% and 51%, respectively, of the Company's total net sales and represented approximately 51% and 54%, respectively, of total Macintosh unit sales. As noted above, the Company experienced an increase in U.S. education channel net sales of 19% for fiscal 2004 compared to 2003. Strong U.S. education net sales for the current year relate primarily to strength in higher education net sales that resulted from a successful back-to-school selling season with strong demand for the Company's portables. This strength drove year-over-year growth in net sales of 40% for the higher education channel during fiscal 2004. The Company's K-12 net sales grew year-over-year by 3% during fiscal 2004, despite the challenges in the K-12 market from continued budget constraints and increased competition, due to the Company's continued focus and success with delivering 1:1 education solutions.

Net sales in the Americas segment during 2003 increased $50 million or 2% compared to 2002. During 2003 and 2002, the Americas segment represented approximately 51% and 55%, respectively, of the Company's total net sales and represented approximately 54% and 56%, respectively, of total Macintosh unit sales. The results of the Americas segment are similar to the overall results of the Company as they reflect substantially lower unit sales and net sales of Power Macintosh systems and iMac systems, partially offset by increases in unit sales and net sales of PowerBooks. The net sales of the Americas segment, and the Company in total, also reflect substantially higher sales of iPods, peripherals, software, and services during 2003 compared to 2002. The Americas segment had been negatively affected by weakness in its U.S. education channel during 2003. Total net sales and unit sales in the U.S. education channel during 2003

33

were down 4% and 6%, respectively, compared to the same period in 2002. The Company believes this decline was caused by increased competition in the education market and by a reduction in spending by U.S. educational institutions due to federal and state funding concerns and tax revenue shortfalls resulting from the weak economy. Additionally, some of the decline during 2003 in net sales and unit sales of Macintosh systems in the Americas segment may be the result of the operation of the Company's Retail segment whose net sales, all of which occurred within the U.S., increased significantly during 2003.

Americas

During fiscal 2004, net sales in the Americas segment grew 26% or $838 million compared to fiscal 2003. The increase in net sales during 2004 was primarily attributable
to the significant year-over-year increase in iPod sales as well as strong sales of peripherals, software, and services. This increase was partially offset by a shift in sales
to the Retail segment, which had 84 stores in the U.S. as of the end of fiscal 2004. Macintosh unit sales also increased by 4% in fiscal 2004 compared to 2003, driven primarily by strong sales of
portable and Power Macintosh systems, partially offset by continued weakness in iMac sales. During 2004 and 2003, the Americas segment represented approximately 49% and 51%, respectively, of the
Company's total net sales and represented approximately 51% and 54%, respectively, of total Macintosh unit sales. As noted above, the Company experienced an increase in U.S. education channel net
sales of 19% for fiscal 2004 compared to 2003. Strong U.S. education net sales for the current year relate primarily to strength in higher education net sales that resulted from a successful
back-to-school selling season with strong demand for the Company's portables. This strength drove year-over-year growth in net sales of 40% for the
higher education channel during fiscal 2004. The Company's K-12 net sales grew year-over-year by 3% during fiscal 2004, despite the challenges in the
K-12 market from continued budget constraints and increased competition, due to the Company's continued focus and success with delivering 1:1 education solutions.

Net
sales in the Americas segment during 2003 increased $50 million or 2% compared to 2002. During 2003 and 2002, the Americas segment represented approximately 51% and 55%, respectively, of
the Company's total net sales and represented approximately 54% and 56%, respectively, of total Macintosh unit sales. The results of the Americas segment are similar to the overall results of the
Company as they reflect substantially lower unit sales and net sales of Power Macintosh systems and iMac systems, partially offset by increases in unit sales and net sales of PowerBooks. The net sales
of the Americas segment, and the Company in total, also reflect substantially higher sales of iPods, peripherals, software, and services during 2003 compared to 2002. The Americas segment had been
negatively affected by weakness in its U.S. education channel during 2003. Total net sales and unit sales in the U.S. education channel during 2003

33

were
down 4% and 6%, respectively, compared to the same period in 2002. The Company believes this decline was caused by increased competition in the education market and by a reduction in spending by
U.S. educational institutions due to federal and state funding concerns and tax revenue shortfalls resulting from the weak economy. Additionally, some of the decline during 2003 in net sales and unit
sales of Macintosh systems in the Americas segment may be the result of the operation of the Company's Retail segment whose net sales, all of which occurred within the U.S., increased significantly
during 2003.

Americas

Net sales in the Americas segment during 2003 increased $50 million or 2% compared to 2002. During 2003 and 2002, the Americas segment represented approximately 51% and 55%, respectively, of the Company's total net sales and represented approximately 54% and 56%, respectively, of total Macintosh unit sales. The results of the Americas segment are similar to the overall results of the Company as they reflect substantially lower unit sales and net sales of Power Macintosh systems and iMac systems, partially offset by increases in unit sales and net sales of PowerBooks. The net sales of the Americas segment, and the Company in total, also reflect substantially higher sales of peripherals, software, and services during 2003 compared to 2002 due primarily to higher sales of iPods and Internet services. The Americas segment has been negatively affected by weakness in its U.S. education channel. As noted above, total net sales and unit sales in the U.S. education channel during 2003 were down 4% and 6%, respectively, compared to the same period in 2002. The Company believes this decline is caused by increased competition in the education market and by a reduction in spending by U.S. educational institutions due to federal and state funding concerns and tax revenue shortfalls resulting from the weak economy. Additionally, some of the decline during 2003 in net sales and unit sales of Macintosh systems in the Americas segment may be the result of the operation of the Company's Retail segment whose net sales, all of which occurred within the U.S., increased significantly during 2003.

Net sales for the Americas segment increased 3% or $94 million in 2002 compared to 2001. The Americas segment was negatively affected by a decline in U.S. education sales in 2002 of $215 million. The Americas segment also experienced a 17% decline in Power Macintosh unit sales. However, outside of the U.S. education channel, unit sales of consumer desktop and portable systems rebounded from the substantial declines experienced in 2001, rising a combined 31% in 2002. Sales of software, peripherals, and accessories were also up in the Americas during 2002. Growth in unit sales of consumer oriented systems during 2002 in the Americas is somewhat attributable to the significantly depressed level of net sales experienced in the first quarter of 2001 as discussed above. However, growth in the Americas was somewhat negatively affected, particularly with respect to consumer-oriented systems, by the significant growth of the Company's Retail segment in the U.S. More than 70% of the Retail segment's Macintosh unit sales during 2002 were for iMacs and iBooks.

Americas

Net sales in the Americas segment during 2003 increased $50 million or 2% compared to 2002. During 2003 and 2002, the Americas segment represented approximately 51% and
55%, respectively, of the Company's total net sales and represented approximately 54% and 56%, respectively, of total Macintosh unit sales. The results of the Americas segment are similar to the
overall results of the Company as they reflect substantially lower unit sales and net sales of Power Macintosh systems and iMac systems, partially offset by increases in unit sales and net sales of
PowerBooks. The net sales of the Americas segment, and the Company in total, also reflect substantially higher sales of peripherals, software, and services during 2003 compared to 2002 due primarily
to higher sales of iPods and
Internet services. The Americas segment has been negatively affected by weakness in its U.S. education channel. As noted above, total net sales and unit sales in the U.S. education channel during 2003
were down 4% and 6%, respectively, compared to the same period in 2002. The Company believes this decline is caused by increased competition in the education market and by a reduction in spending by
U.S. educational institutions due to federal and state funding concerns and tax revenue shortfalls resulting from the weak economy. Additionally, some of the decline during 2003 in net sales and unit
sales of Macintosh systems in the Americas segment may be the result of the operation of the Company's Retail segment whose net sales, all of which occurred within the U.S., increased significantly
during 2003.

Net
sales for the Americas segment increased 3% or $94 million in 2002 compared to 2001. The Americas segment was negatively affected by a decline in U.S. education sales in 2002 of
$215 million. The Americas segment also experienced a 17% decline in Power Macintosh unit sales. However, outside of the U.S. education channel, unit sales of consumer desktop and portable
systems rebounded from the substantial declines experienced in 2001, rising a combined 31% in 2002. Sales of software, peripherals, and accessories were also up in the Americas during 2002. Growth in
unit sales of consumer oriented systems during 2002 in the Americas is somewhat attributable to the significantly depressed level of net sales experienced in the first quarter of 2001 as discussed
above. However, growth in the Americas was somewhat negatively affected, particularly with respect to consumer-oriented systems, by the significant growth of the Company's Retail segment in the U.S.
More than 70% of the Retail segment's Macintosh unit sales during 2002 were for iMacs and iBooks.

Americas

Net sales for the Americas segment increased 3% or $92 million in 2002. As discussed above, the Americas segment was negatively affected by a decline in U.S. education sales in 2002 of $215 million. The Americas segment also experienced a 17% decline in Power Macintosh unit sales. However, outside of the U.S. education channel, unit sales of consumer desktop and portable systems rebounded from the substantial declines experienced in 2001, rising a combined 31% in 2002. Sales of software, peripherals, and accessories were also up in the Americas during 2002. Growth in unit sales of consumer oriented systems during 2002 in the Americas is somewhat attributable to the significantly depressed level of net sales experienced in the first quarter of 2001 discussed above. However, growth in the Americas was somewhat negatively affected, particularly with respect to consumer-oriented systems, by the significant growth of the Company's Retail segment in the U.S. More than 70% of the Retail segment's Macintosh unit sales during 2002 were for iMacs and iBooks.

The Americas segment's 2001 net sales and unit sales declined 30% and 29%, respectively, from 2000. The operating performance of the Americas segment for 2001 reflects the Company's overall performance characterized by significant declines in year-over-year quarterly net sales and units sales, particularly during the first quarter and particularly in consumer channels, with sequential increases in unit sales and net sales during each of the last three quarters of 2001. Net sales in the Americas segment during 2001 were also negatively affected by the Company's overall reduction in channel inventories during the year. Consumer sales in the Americas were particularly hard hit by current economic conditions. Outside of the U.S. education channel, unit sales of the Company's consumer oriented iMac fell 64% in 2001. The effect of falling consumer demand in the Americas segment was partially offset by strong U.S. education sales. The Company's unit sales in U.S. education markets rose 7% in 2001 driven by the acceptance of the

25

Company's new portable products, particularly the iBook, and reflect a general shift in demand in the U.S. education market towards portable versus desktop systems. Portable systems accounted for 28% of total unit sales in the Company's U.S. education market in 2001 compared to 18% during 2000.

During 2002 and 2001, the Americas segment represented approximately 54% and 56%, respectively, of the Company's total net sales and represented approximately 56% and 57%, respectively, of total Macintosh unit sales.

Americas

Net sales for the Americas segment increased 3% or $92 million in 2002. As discussed above, the Americas segment was negatively affected by a decline in U.S. education
sales in 2002 of $215 million. The Americas segment also experienced a 17% decline in Power Macintosh unit sales. However, outside of the U.S. education channel, unit sales of consumer desktop
and portable systems rebounded from the substantial declines experienced in 2001, rising a combined 31% in 2002. Sales of software, peripherals, and accessories were also up in the Americas during
2002. Growth in unit sales of consumer oriented systems during 2002 in the Americas is somewhat attributable to the significantly depressed level of net sales experienced in the first quarter of 2001
discussed above. However, growth in the Americas was somewhat negatively affected, particularly with respect to consumer-oriented systems, by the significant growth of the Company's Retail segment in
the U.S. More than 70% of the Retail segment's Macintosh unit sales during 2002 were for iMacs and iBooks.

The
Americas segment's 2001 net sales and unit sales declined 30% and 29%, respectively, from 2000. The operating performance of the Americas segment for 2001 reflects the Company's overall
performance characterized by significant declines in year-over-year quarterly net sales and units sales, particularly during the first quarter and particularly in consumer
channels, with sequential increases in unit sales and net sales during each of the last three quarters of 2001. Net sales in the Americas segment during 2001 were also negatively affected by the
Company's overall reduction in channel inventories during the year. Consumer sales in the Americas were particularly hard hit by current economic conditions. Outside of the U.S. education channel,
unit sales of the Company's consumer oriented iMac fell 64% in 2001. The effect of falling consumer demand in the Americas segment was partially offset by strong U.S. education sales. The Company's
unit sales in U.S. education markets rose 7% in 2001 driven by the acceptance of the

25

Company's new portable products, particularly the iBook, and reflect a general shift in demand in the U.S. education market towards portable versus desktop systems. Portable systems accounted for 28%
of total unit sales in the Company's U.S. education market in 2001 compared to 18% during 2000.

During
2002 and 2001, the Americas segment represented approximately 54% and 56%, respectively, of the Company's total net sales and represented approximately 56% and 57%, respectively, of total
Macintosh unit sales.