Apple 2012 Annual Report Download - page 33

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by the Company can also significantly impact the level of net sales experienced by the Company in any particular
quarter. However, neither historical seasonal patterns nor historical patterns of product introductions should be
considered reliable indicators of the Company’s future net sales or financial performance.
Growth in total net sales was particularly strong during the first six months of 2012, rising $34.1 billion or 66%
compared to the same period in 2011. The net sales growth during the first six months of 2012 reflects the launch of
iPhone 4S in the first quarter of 2012 and the Company’s ability to meet demand more quickly for iPhone 4S when
compared to the iPhone 4 launch. Growth during the first half of 2012 was also favorably impacted by the addition
of a 14th week in the first quarter of 2012 and strong unit sales of iPad during the holiday season, resulting in a
111% increase in iPad unit sales during the first quarter of 2012 compared to the same quarter in 2011.
Fiscal Year 2011 versus 2010
Net sales during 2011 increased $43.0 billion or 66% compared to 2010. Several factors contributed positively to
this increase, including the following:
• Net sales of iPhone and related products and services were $47.1 billion in 2011, representing an
increase of $21.9 billion or 87% compared to 2010. iPhone unit sales totaled 72.3 million during 2011,
representing an increase of 32.3 million units or 81% compared to 2010. iPhone year-over-year net
sales growth reflected strong demand for iPhone 4 in all of the Company’s operating segments. The
expanded U.S. distribution of iPhone to the Verizon Wireless network beginning in February 2011,
continued expansion into new countries, and increased distribution with other new carriers and resellers
also contributed to the year-over-year growth of iPhone. Net sales of iPhone and related products and
services accounted for 43% and 39% of the Company’s total net sales for 2011 and 2010, respectively.
• Net sales of iPad and related products and services, which the Company introduced in the third quarter
of 2010, were $20.4 billion in 2011, representing an increase of $15.4 billion or 311% compared to
2010. Unit sales of iPad were 32.4 million during 2011, an increase of 334% from 2010. The year-
over-year unit growth and net sales growth were driven by strong iPad demand in all of the Company’s
operating segments. Net sales of iPad and related products and services accounted for 19% and 8% of
the Company’s total net sales for 2011 and 2010, respectively.
• Mac net sales were $21.8 billion in 2011, representing an increase of $4.3 billion or 25% compared to
2010. Mac unit sales increased by 3.1 million or 22% in 2011 compared to 2010. The year-over-year
growth in Mac net sales and unit sales was due primarily to higher demand in all of the Company’s
operating segments for MacBook Air and MacBook Pro, which were updated in July 2011 and
February 2011, respectively. The year-over-year revenue growth for portables and desktops was 36%
and 4%, respectively. Mac net sales accounted for 20% and 27% of the Company’s total net sales for
2011 and 2010, respectively.
• Net sales of other music related products and services were $6.3 billion in 2011, representing an
increase of $1.4 billion or 28% compared to 2010. The increase was due primarily to increased net
sales from the iTunes Store, which was largely driven by App Store expansion into new countries that
contributed to strong growth in all of the Company’s geographic segments. During 2011, net sales for
the iTunes Store, App Store and iBookstore was $5.4 billion, representing an increase of 33%
compared to 2010. The Company believes this continued growth was the result of heightened consumer
interest in downloading third-party digital content, continued growth in its customer base of iOS
devices, expansion of third-party audio and video content available via the iTunes Store, and continued
interest in and growth of the App Store. Net sales of other music related products and services
accounted for 6% and 8% of the Company’s total net sales for 2011 and 2010, respectively.
Partially offsetting the positive factors contributing to the overall increase in net sales was a decrease in iPod net
sales of $821 million or 10% during 2011 compared to 2010. Similarly, iPod unit sales decreased by 15% in 2011
compared to 2010. However, net sales per iPod unit sold increased during 2011 compared to 2010 due primarily
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