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to a shift in iPod product mix toward iPod touch. Net sales of iPod accounted for 7% and 13% of the Company’s
total net sales for 2011 and 2010, respectively.
Segment Operating Performance
The Company manages its business primarily on a geographic basis. The Company’s reportable operating
segments consist of the Americas, Europe, Japan, Asia-Pacific and Retail operations. The results of the
Americas, Europe, Japan and Asia-Pacific segments do not include results of the Retail segment. The Americas
segment includes both North and South America. The Europe segment includes European countries, as well as
the Middle East and Africa. The Asia-Pacific segment includes Australia and Asian countries, other than Japan.
The Retail segment operates Apple retail stores in 13 countries, including the U.S. Each operating segment
provides similar hardware and software products and similar services. Further information regarding the
Company’s operating segments may be found in Part II, Item 8 of this Form 10-K in the Notes to Consolidated
Financial Statements in Note 8, “Segment Information and Geographic Data.”
Americas
Net sales in the Americas segment increased $19.2 billion or 50% during 2012 compared to 2011. The growth in
net sales during 2012 was primarily driven by increased demand for iPhone following the launches of iPhone 4S
and iPhone 5, strong demand for the new iPad and iPad 2, and higher sales from the iTunes Store. The Americas
segment represented approximately 37% and 35% of the Company’s total net sales for 2012 and 2011,
respectively.
Net sales in the Americas segment increased $13.8 billion or 56% during 2011 compared to 2010. The primary
contributors to the growth in net sales was a significant year-over-year increase in iPhone sales from carrier
expansion and strong demand for iPhone 4 and increased sales of iPad and Mac, partially offset by a decrease in
iPod sales. Higher sales of third-party digital content and applications from the iTunes Store also drove an
increase in net sales during 2011. The Americas segment represented approximately 35% and 37% of the
Company’s total net sales for 2011 and 2010, respectively.
Europe
Net sales in the Europe segment increased $8.5 billion or 31% during 2012 compared to 2011. The growth in net
sales during 2012 was primarily driven by strong demand for the new iPad and iPad 2, higher sales from the
iTunes Store and increased demand for iPhone from the launch of iPhone 4S. iPhone 5 was launched in a limited
number of countries in the Europe segment at the end of the fourth quarter of 2012 and did not contribute to the
growth in net sales in the Europe segment to the extent it did in other segments. Lower year-over-year growth in
net sales in the Europe segment during 2012 compared to the Company’s other geographic segments reflects
growth in iPhone unit sales that was well below the growth rates experienced by the Company’s other operating
segments, partially offset by strong growth in iPad unit sales. Net sales in the Europe segment were also
negatively impacted by the region’s uncertain economic conditions and the strength in the U.S. dollar relative to
several European currencies, including the euro. The Europe segment represented approximately 23% and 26%
of the Company’s total net sales for 2012 and 2011, respectively.
Net sales in the Europe segment increased $9.1 billion or 49% during 2011 compared to 2010. The increase in
net sales during 2011 was attributable primarily to the continued year-over-year increase in iPhone sales from
carrier expansion and strong demand for iPhone 4, and increased sales of iPad and Mac, partially offset by a
decrease in iPod sales. The Europe segment represented 26% and 29% of the Company’s total net sales for 2011
and 2010, respectively.
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