Apple 2008 Annual Report Download - page 89

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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 9—Segment Information and Geographic Data (Continued)
Information regarding net sales by product for the three fiscal years ended September 27, 2008, is as follows (in millions):
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 $871,000, $776,000, and
$202,000 in expenses pursuant to the Reimbursement Agreement during 2008, 2007, and 2006, respectively. All expenses recognized pursuant
to the Reimbursement Agreement have been included in selling, general, and administrative expenses in the Consolidated Statements of
Operations.
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.
86
2008
2007
2006
Net sales:
Desktops (a)
$
5,603
$
4,020
$
3,319
Portables (b)
8,673
6,294
4,056
Total Mac net sales
14,276
10,314
7,375
iPod
9,153
8,305
7,676
Other music related products and services (c)
3,340
2,496
1,885
iPhone and related products and services (d)
1,844
123
—
Peripherals and other hardware (e)
1,659
1,260
1,100
Software, service, and other net sales (f)
2,207
1,508
1,279
Total net sales
$
32,479
$
24,006
$
19,315
(a)
Includes iMac, Mac mini, Mac Pro, Power Mac, and Xserve product lines.
(b)
Includes MacBook, iBook, MacBook Air, 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.