Apple 2008 Annual Report Download - page 45

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Table of Contents
NM = Not Meaningful
Fiscal Year 2008 versus 2007
Net sales during 2008 increased 35% or $8.5 billion from 2007. Several factors contributed to these increases including the following:
42
(a)
Other Segments include Asia Pacific and FileMaker.
(b)
Includes iMac, Mac mini, Mac Pro, Power Mac, and Xserve product lines.
(c)
Includes MacBook, iBook, MacBook Air, MacBook Pro, and PowerBook product lines.
(d)
Consists of iTunes Store sales, iPod services, and Apple
-
branded and third
-
party iPod accessories.
(e)
Derived from handset sales, carrier agreements, and Apple
-
branded and third
-
party iPhone accessories.
(f)
Includes sales of Apple
-
branded and third
-
party displays, wireless connectivity and networking solutions, and other hardware accessories.
(g)
Includes sales of Apple
-
branded operating system and application software, third
-
party software, AppleCare, and Internet services.
(h)
Derived by dividing total Mac net sales by total Mac unit sales.
(i)
Derived by dividing total iPod net sales by total iPod unit sales.
•
Mac net sales increased $4.0 billion or 38% during 2008 compared to 2007, while Mac unit sales increased by 2.7 million units or 38%.
Net sales related to the Company
’s Mac shipments accounted for 44% of the Company’
s total net revenue. Higher Mac unit sales, which
contributed to the increases in net sales, were driven by higher sales of all of the Company’s portable products as well as the popularity
of the iMac, which experienced strong growth in net sales and unit sales in all of the Company’s reportable segments. Unit sales of the
Company’s portable products accounted for 62% of the Company’s personal computer shipments in both 2008 and 2007. Net sales and
unit sales of the Company’s portable products both increased by 38% during 2008 compared to 2007. This growth was attributable to
strong demand for all the portable products, particularly the MacBook, which had double-digit growth in all of the Company’
s operating
segments, and the addition of the MacBook Air, which was introduced to the Company’s portable product line in January 2008. Growth
of the Company’s desktop systems was also strong, with increased net sales and unit sales of 39% and 37%, respectively, during 2008
due primarily to strong sales of the iMac in all of the Company
’
s operating segments.
•
Net sales of iPods increased $848 million or 10% during 2008 compared to 2007 whereas unit sales of iPods increased 6% compared to
2007. The iPod unit growth was due to strong demand for the iPod touch, and to a lesser extent, higher unit sales of the iPod shuffle due
to a price reduction in February 2008. iPod net sales grew faster than iPod unit sales due to higher average selling prices caused by a
shift in overall iPod product mix to the higher priced iPod touch.
•
Net sales of iPhone and related products and services were $1.8 billion for 2008, with iPhone handset unit sales totaling 11.6 million.
During 2008, sales of iPhone expanded beyond the U.S. and the Company expects to be shipping iPhones in over 70 countries by the
end of December 2008. Net sales of iPhone and related products and services were $123 million in 2007, which represented sales for
one fiscal quarter. iPhone net sales include the portion of handset revenue recognized in accordance with subscription accounting over
the product
’
s 24
-
month estimated economic life, as well as revenue from sales of iPhone accessories and from carrier agreements.
•
Net sales of other music related products and services increased $844 million or 34% during the 2008 compared to 2007, due primarily
to significantly increased net sales from the iTunes Store in each of the Company’s geographic segments. The Company believes this
success is the result of heightened consumer interest in downloading third-party digital content, the expansion of third-party audio and
video content available for sale and rent via the iTunes Store, and the launch of the iTunes App Store. The Company continues to
expand its iTunes content offerings around the world.
•
Net sales of peripherals and other hardware increased $399 million or 32% compared to 2007 due to an increase in wireless networking
products and other hardware accessories, including printers and scanners, which was partially offset by a decrease in net sales of
displays.