Apple Reports Second Quarter Results

Apple today announced financial results for its fiscal 2007 second quarter ended March 31st, 2007. The Company posted revenue of US$5.26 billion and net quarterly profit of US$770 million, or $0.87 per diluted share. These results compare to revenue of US$4.36 billion and net quarterly profit of US$410 million, or $0.47 per diluted share, in the year-ago quarter. Gross margin was 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter's revenue.

Apple shipped 1,517,000 Macintosh computers and 10,549,000 iPods during the quarter, representing 36 percent growth in Macs and 24 percent growth in iPods over the year-ago quarter.

“The Mac is clearly gaining market share, with sales growing 36 percent — more than three times the industry growth rate”, said Steve Jobs, Apple's CEO. “We're very excited about the upcoming launch of iPhone in late June, and are also hard at work on some other amazing new products in our pipeline”.

“We are very pleased to report the most profitable March quarter in Apple's history”, said Peter Oppenheimer, Apple's CFO. “Looking ahead to the third fiscal quarter of 2007, we expect revenue of about $5.1 billion and earnings per diluted share of about $0.66”.

This press release contains forward-looking statements about the Company's estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include potential litigation and government enforcement actions that may result from the matters investigated by the special committee of the board of directors and the restatement of the Company's consolidated financial statements; unfavourable results of legal proceedings; the effect of competitive and economic factors, and the Company's reaction to those factors, on consumer and business buying decisions with respect to the Company's products; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery or demand of products; continued competitive pressures in the marketplace;  the continued availability on acceptable terms of certain components and services essential to the Company's business currently obtained by the Company from sole or limited sources; the ability of the Company to make timely delivery of new programmes, products and successful technological innovations to the marketplace; the effect that product quality problems could have on the Company's sales and operating profits; the inventory risk associated with the Company's need to order or commit to order product components in advance of customer orders; the effect that the Company's dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; the Company's dependency on the performance of distributors and other resellers of the Company's products; the Company's reliance on the availability of third-party digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; and risks associated with the Company's retail initiative, including significant investment cost, uncertain consumer acceptance and potential impact on existing reseller relationships. More information on potential factors that could affect the Company's financial results is included from time to time in the Company's public reports filed with the SEC, including the Company's Form 10-K for the fiscal year ended September 30th, 2006, its Form 10-Q for the quarter ended December 30th, 2006 and its Form 10-Q for the quarter ended March 31st, 2007, to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Catharina Holmström
Apple Nordic Region
holmstrom.c@euro.apple.com
(+46) 705 74 97 17

Andreas Rødland
Apeland Informasjon
andreas@apeland.no
(+47) 99 59 99 50