Apple 2007 Annual Report Download - page 93

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Information regarding net sales by product is as follows (in millions):
(a)
2007
2006
2005
Net sales:
Desktops (a)
$
4,020
$
3,319
$
3,436
Portables (b)
6,294
4,056
2,839
Total Mac net sales
10,314
7,375
6,275
iPod
8,305
7,676
4,540
Other music related products and services (c)
2,496
1,885
899
iPhone and related products and services (d)
123
—
—
Peripherals and other hardware (e)
1,260
1,100
1,126
Software, service, and other net sales (f)
1,508
1,279
1,091
Total net sales
$
24,006
$
19,315
$
13,931
Includes iMac, eMac, Mac mini, Power Mac, Mac Pro, and Xserve product lines.
(b)
Includes MacBook, iBook, MacBook Pro, and PowerBook product lines.
(c) Consists of iTunes Store sales and iPod services, and Apple-branded and third-party iPod accessories.
(d) Derived from handset sales, carrier agreements, and Apple-branded and third-party iPhone accessories.
(e)
Includes sales of Apple
-
branded and third
-
party displays, wireless connectivity and networking solutions, and other hardware
accessories.
(f) Includes sales of Apple-branded operating system and application software, third-party software, AppleCare, and Internet
services.
Note 10—Related Party Transactions and Certain Other Transactions
The Company entered into a Reimbursement Agreement with its CEO, Steve Jobs, for the reimbursement of expenses incurred by Mr. Jobs in
the operation of his private plane when used for Apple business. The Company recognized a total of approximately $776,000, $202,000, and
$1,100,000 in expenses pursuant to the Reimbursement Agreement during 2007, 2006, and 2005, respectively.
In 2006, the Company entered into an agreement with Pixar to sell certain of Pixar's short films on the iTunes Store. Mr. Jobs was the CEO,
Chairman, and a large shareholder of Pixar. On May 5, 2006, The Walt Disney Company ("Disney") acquired Pixar, which resulted in Pixar
becoming a wholly-owned subsidiary of Disney. Upon Disney's acquisition of Pixar, Mr. Jobs' shares of Pixar common stock were exchanged
for Disney's common stock and he was elected to the Disney Board of Directors. Royalty expense recognized by the Company under the
arrangement with Pixar from September 25, 2005 through May 5, 2006 was less than $1 million.
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