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Net sales during the second quarter of 2011 and the first six months of 2011 increased $11.2 billion or 83%, and $22.2 billion or 76%, respectively, compared to the same periods in 2010. Several factors contributed positively to this increase, including the following:

  • Net sales of iPhone and related products and services were $12.3 billion and $22.8 billion in the second quarter of 2011 and first six months of 2011, respectively, representing an increase of 126% and 107%, compared to the same periods in

    • 2010.

      Net sales of iPhone and related products and services accounted for 50% and 44% of the Company’s total net sales for the second quarter of 2011 and first six months of 2011, respectively. iPhone handset unit sales totaled 18.6 million and

    • 34.9

      million during the second quarter of 2011 and first six months of 2011, respectively. iPhone unit sales increased

    • 9.9

      million or 113% during the second quarter of 2011 and 17.4 million or 99% during the first six months of 2011 compared to the same periods in 2010. iPhone year-over-year net sales growth reflects strong demand for iPhone 4 in all of the Company’s operating segments and the expanded U.S. distribution of iPhone to the Verizon Wireless network beginning in February 2011. Continued expansion of distribution with other new carriers and resellers also contributed to the year-over-year growth of iPhone. As of March 26, 2011, the Company distributed iPhone in 90 countries through 186 carriers.

  • Net sales of iPad and related products and services were $2.8 billion and $7.4 billion in the second quarter of 2011 and first six months of 2011, respectively. Unit sales of iPad were 4.7 million and 12.0 million during the second quarter of 2011 and first six months of 2011. The iPad 2 was introduced in March 2011. Including both the original iPad and iPad 2, the Company had distribution in 59 countries as of March 26, 2011. The Company distributes iPad through its direct channels, certain cellular network carriers’ distribution channels and certain third-party resellers. Net sales of iPad and related products and services accounted for 11% and 14% of the Company’s total net sales for the second quarter of 2011 and first six months of 2011.

  • Mac net sales increased by $1.2 billion or 32% and $2.2 billion or 27% in the second quarter of 2011 and first six months of 2011, respectively, compared to the same periods in 2010. Mac unit sales increased by 817,000 or 28% and 1.6 million or 25% in the second quarter of 2011 and first six months of 2011, respectively, compared to the same periods in 2010. The year-over-year growth in Mac net sales and unit sales was due to higher demand for MacBook Pro and MacBook Air, which were updated in February 2011 and October 2010, respectively, and experienced significant growth in all of the Company’s operating segments. Net sales per Mac unit sold for the second quarter of 2011 and first six months of 2011 increased 4% and 1%, respectively, compared to the same periods in 2010. Net sales of the Company’s Macs accounted for 20% of the Company’s total net sales for both the second quarter of 2011 and first six months of 2011.

  • Net sales of iPod decreased $261 million or 14% during the second quarter of 2011, and decreased $227 million or 4% during the first six months of 2011 compared to the same periods in 2010. Similarly, iPod unit sales decreased by 17% and 11% in the second quarter of 2011 and first six months of 2010, respectively, compared to the same periods in 2010. However, net sales per iPod unit sold increased from $171 in the second quarter of 2010 to $177 in the second quarter of 2011, and increased from $165 for the first six months of 2010 to $177 for the first six months of 2011. The increases in net sales per iPod unit sold resulted from a shift in product mix toward iPod touch. Net sales of iPod accounted for 6% and 10% of the Company’s total net sales for the second quarter of 2011 and first six months of 2011, respectively.

  • Net sales of other music related products and services increased $307 million or 23% and $574 million or 23% during the second quarter of 2011 and first six months of 2011, respectively, compared to the same periods in 2010. The increases were due primarily to increased net sales from the iTunes Store, which experienced growth in all of the Company’s geographic segments. During the second quarter of 2011 and the first six months of 2011, the combined net sales for the iTunes Store, App Store and iBookstore were $1.4 billion and $2.5 billion, respectively. The Company believes this continued growth is the result of heightened consumer interest in downloading third-party digital content, continued growth in its customer base of iPhone, iPad and iPod customers, the expansion of third-party audio and video content available for sale and rent via the iTunes Store, and the continued interest in and growth of the App Store. The Company continues to expand its iTunes content and applications offerings around the world. Net sales of other music related products and services accounted for 7% and 6% of the Company’s total net revenue for the second quarter of 2011 and first six months of 2011, respectively.

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