Blog Post

Apple 10-K: Rise of the iPhone

Apple (s aapl) has released its Form 10-K (PDF) for the fiscal year 2009, the annual report providing a summary of the company’s performance. A number of interesting details can be found within the long and tedious document, but the biggest news is the increasing importance of the iPhone to Apple’s bottom line.


Apple sold 20.7 million iPhones in the fiscal year, $6.75 billion in net sales, which includes accessories and carrier agreement revenue. Comparing that with just $123 million in 2007 shows just how important the iPhone is to Apple. The iPhone now accounts for about 18 percent of Apple’s sales revenue, but that’s using subscription accounting to spread the revenue over 24 months. Using non-GAAP numbers, the Mac and the iPhone now each account for about a third of Apple’s net sales.

As for the Mac, during the fiscal year Apple sold 10,396,000 computers, a new base-ten record, while the iPod continues to sell around 54 million units a year. However, unlike the iPhone, both the Mac and the iPod apparently have been affected by the recession. Of the other product categories, the iTunes Store, or “other music and product related services,” and software continue to show steady growth.

Browsing the rest of the Form 10-K, a few other points of interest for fiscal year 2009 include:

  • Net sales were $36.5 billion for the fiscal year, $5.7 billion in net income, bringing Apple’s cash on hand to $34 billion.
  • Apple has 34,300 full-time employees.
  • R&D has grown from $782 million in 2007 to $1.3 billion in 2009.
  • Apple spent half a billion dollars on ads, up slightly from the previous year.
  • Regarding the patent lawsuit with Nokia, Apple “intends to defend the case vigorously.”
  • An investment of $100 in AAPL in 2004 would be worth $957 today.
  • The Americas account for 44 percent of net sales.
  • Unit sales of Macs were up 40 percent in Europe.
  • The total number of Apple Stores was 273, up from 247 and 197 for the previous two years.

2009 was an amazing year for Apple by pretty much any metric. However, the introduction of the iPhone in China and possible end of carrier exclusivity in the U.S., the addition of a tablet product, and continued growth in Mac sales all suggest 2010 will be even better.