Apple 2011 Annual Report Download - page 36

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Asia
-Pacific
Net sales in the Asia Pacific segment increased $14.3 billion or 174% during 2011 compared to 2010. The Company experienced particularly
strong year-over-
year net sales growth in its Asia Pacific segment during 2011, especially in Greater China, which includes Hong Kong and
Taiwan. Korea and Australia also experienced strong year-over-
year revenue growth. Higher net sales in the Asia Pacific segment were due
mainly to the increase in iPhone revenue primarily attributable to the strong demand for iPhone 4 and carrier expansion, strong sales of iPad, and
increased sales of Macs. The Asia Pacific segment represented 21% and 13% of total net sales in 2011 and 2010, respectively.
Net sales in Asia
-Pacific increased $5.1 billion or 160% during 2010 compared to 2009. The significant growth in Asia-
Pacific net sales was due
mainly to increased iPhone revenue, which was primarily attributable to country and carrier expansion and continued growth from existing
carriers. Asia-
Pacific net sales were also favorably affected by strong demand for Mac portable and desktop systems and for iPad. Particularly
strong year-over-year growth was experienced in China, Korea and Australia. The Asia-
Pacific segment represented 13% and 7% of the
Company’s total net sales for 2010 and 2009, respectively.
Retail
Retail segment net sales increased $4.3 billion or 44% during 2011 compared to 2010. The increase in net sales was driven primarily by strong
demand for iPad, higher sales of Macs, and an increase in iPhone revenue. The Company opened 40 new retail stores during 2011, 28 of which
were outside the U.S., ending the year with 357 stores open compared to 317 stores at the end of 2010. As of September 24, 2011, the Company
had a total of 245 U.S. retail stores and 112 international retail stores.
During 2011, the Company had an average of 326 stores compared to an average of 288 stores during 2010. The average revenue per store
increased 27% to $43.3 million in 2011 compared to $34.1 million in 2010. The Retail segment represented 13% and 15% of total net sales in
2011 and 2010, respectively.
Retail net sales increased $3.1 billion or 47% during 2010 compared to 2009. The increase in net sales was driven primarily by strong demand
for iPad, increased sales of Mac desktop and portable systems and a significant year-over-
year increase in iPhone revenue. The Company opened
44 new retail stores during 2010, 28 of which were outside the U.S., ending the year with 317 stores open compared to 273 stores at the end of
2009. With an average of 288 stores and 254 stores opened during 2010 and 2009, respectively, average revenue per store increased to $34.1
million in 2010, compared to $26.2 million in 2009. The Retail segment represented 15% and 16% of the Company’
s total net sales in 2010 and
2009, respectively.
The Retail segment reported operating income of $3.3 billion during 2011 compared to $2.4 billion during 2010. The year-over-
year increase in
Retail operating income was primarily attributable to higher overall net sales that resulted in significantly higher average revenue per store
during 2011 compared to 2010. The Retail segment reported operating income of $1.7 billion during 2009. The increase in Retail operating
income during 2010 compared to 2009 was attributable to higher overall net sales.
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 since
inception totaled $2.8 billion through the end of 2011. As of September 24, 2011, the Retail segment had approximately 36,000 full-
time
equivalent employees and had outstanding lease commitments associated with retail space and related facilities of $2.4 billion. The Company
would incur substantial costs if it were to close multiple retail stores and such costs could adversely affect the Company’
s financial condition and
operating results.
34