December 16, 2005
(Macworld UK)
Apple Computer Inc.'s Mac unit sales have increased 27% while average prices have fallen 7%, Apple's Form 10-K revealed earlier this month.
Total Mac net sales increased $1.4 billion or 27% during the company's 2005 fiscal year compared to fiscal 2004, the company disclosed in its regulatory filing. Mac unit sales climbed 1.2 million units or 38% during 2005 compared to 2004.
Apple is also enjoying a 21% year-on-year growth in higher education sales, and 11% growth in the K-12 education markets.
Net sales of iPods rose $3.2 billion or 248% during 2005 compared to the previous year. Unit sales of iPods totaled 22.5 million in 2005, which represents an increase of 409% from the 4.4 million iPod units sold in 2004, Apple said.
"Apple believes that the success of the iPod is having a positive impact on Mac sales by introducing new customers to Apple's other products," the company stated.
Net sales of other music related products and services increased $621 million or 223% during 2005 compared to 2004, the company said. These include iTunes Music Store sales.
Apple's retail segment continues to boom. The company opened up 38 new brick-and-mortar retail stores in 2005, expanding operations internationally into Canada, Japan and the U.K. Retail sales grew almost double, to $2.4 billion during 2005. Annualized revenue per store reached $22.4 million. This gathered income of $151 million during 2005, compared to just $39 million during 2004.
During 2005, net sales in the Americas grew 64% or $2.6 billion compared to 2004, primarily because of significantly-higher iPod sales, the company said.
Apple's European business is also booming. Net sales in the Europe segment grew $1.3 billion or 71% from 2004. Total Mac unit sales in Europe grew 47%, year-on-year. Desktop computer sales climbed 56% in Europe, Apple said.
It seems Apple is beginning to regain lost ground in Japan, where net sales and Mac unit sales climbed 36% and 8%, respectively, during 2005 compared to 2004. "Japan experienced increased net sales in desktop products, iPod, and other music related products and services," Apple said.
Desktop unit sales were up 41% and iPod sales increased by 220% year-on-year in Japan.
Apple will spend roughly $390 million for capital expenditures in fiscal 2006, compared to $260 million in fiscal 2005. About $210 million of that amount will be used for expanding its retail segment.
The company also intends to boost its research and development (R&D) spending. "To remain competitive, the company believes that increased investment in R&D and marketing and advertising is necessary to maintain and extend its position in the markets where it competes," the company said.
R&D expense amounted to approximately 4% of total net sales during 2005 down from 6% and 8% of total net sales in 2004 and 2003, respectively. "This decrease is due to the significant increase of 68% in total net sales in 2005," Apple said.
All the same, Apple's total R&D expenditures in 2005 totaled $534 million in 2005, an increase of more than 9% from 2004.
Apple spent $287 million on advertising in 2005, compared to $206 million it spent in 2004.