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Table of Contents
strong demand for iPod touch and iPod nano. Additionally, Mac net sales and unit sales grew 42% and 29%, respectively, in 2008 compared to
2007 due to increases in sales of iMac and Mac portable systems, particularly MacBook, as well as the introduction of MacBook Air in January
2008.
Retail
Retail net sales increased $259 million or 4% during 2009 compared to 2008. The growth in net sales was driven largely by increased iPhone
revenue and Mac portable systems, offset partially by a decrease in sales of iPods and Mac desktop systems. The Company opened 26 new retail
stores during 2009, including a total of 14 international stores, ending the year with 273 stores open. This compares to 247 stores open as of
September 27, 2008 and 197 open stores as of September 29, 2007.
The year-over-
year growth rate of Retail net sales was less than the increase in the average number of stores open during the same period, which
the Company believes reflects the challenging consumer-spending environment and continued third-
party channel expansion, particularly in the
U.S. where most of its stores are located. With an average of 254 stores and 211 stores opened during 2009 and 2008, respectively, average
revenue per store decreased to $25.9 million for 2009 from $29.9 million in 2008.
The Retail segment’
s net sales grew by 53% during 2008 compared to 2007, due in large part to increased sales of Mac portable and desktop
systems, strong demand for the iPhone and iPod touch, and new store openings. The Company opened 50 new retail stores during 2008, bringing
the total number of open stores to 247 as of September 27, 2008. This compares to 197 open stores as of September 29, 2007. With an average of
211 stores and 178 stores opened during 2008 and 2007, respectively, average revenue per store increased to $29.9 million for 2008 from $23.1
million in 2007.
As measured by the Company’
s operating segment reporting, the Retail segment reported operating income of $1.4 billion during 2009, as
compared to operating income of $1.3 billion and $875 million during 2008 and 2007, respectively. This increase in operating income in 2009
was driven by increased total Retail net sales attributable to a 20% increase in average stores open and higher gross margin percentage consistent
with that experienced Company-wide. The Retail segment’
s operating income increased by $462 million during 2008 as compared to 2007 due
primarily to the significant Retail net sales growth of 53% as compared to 2007.
Expansion of the Retail segment has required and will continue to require a substantial investment in fixed assets and related infrastructure,
operating lease commitments, personnel, and other operating expenses. Capital asset purchases associated with the Retail segment
were $369
million in 2009, bringing the total capital asset purchases since inception of the Retail segment to $1.8 billion. As of September 26, 2009, the
Retail segment had approximately 16,500 full-
time equivalent employees and had outstanding operating lease commitments associated with
retail store space and related facilities of $1.5 billion. The Company would incur substantial costs if it were to close multiple retail stores. Such
costs could adversely affect the Company’s financial condition and operating results.
Other Segments
The Company’
s Other Segments, which consist of its Asia Pacific and FileMaker operations, experienced an increase in net sales of $165
million, or 7%, during 2009 as compared to 2008 reflecting strong growth in sales of iPhone and Mac portable systems offset partially by a
decline in sales related to iPods and Mac desktop systems in the Asia Pacific region, as well as a strengthening of the U.S. dollar against the
Australian dollar and other Asian currencies. Mac net sales and unit sales grew in the Asia Pacific region by 4% and 17%, respectively, due to
increased sales of the MacBook Pro.
The Company’
s Other Segments experienced an increase in net sales of $707 million, or 40% during 2008 as compared to 2007. These increases
are related primarily to strong growth in sales of all Mac portable systems,
45