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10-K Watch: Apple’s iPod Net Sales Dropped 12 Percent In 2009; iTunes Up

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Apple (NSDQ: AAPL) is still selling millions of iPods but making less from them, according to the 10-K filed with the SEC late this afternoon: net sales dropped $1.1 billion—12 percent—to $8.091 billion in fiscal 2009, while unit sales of 54 million for the year were down only 1 percent. (Yes, it’s hard to think of that many iPods being a decrease.) Each iPod sale netted $149 for Apple, down 11 percent from $167 in 2008 due to lower prices across the board. The lower prices and revenue were due primarily to price reductions connected to new models introduced in September ‘08 and ‘09. The stronger U.S. dollar also contributed. But, the company says, the declines were offset partly by a “higher product mix of iPod touch.” It’s a sharp turnaround from 2008, when net sales were up 10 percent and unit sales rose 6 percent.

iTunes: The iTunes store had double-digit growth in every region, which Apple attributes to a host of factors, apparently in no particular order: “heightened consumer interest in downloading third-party digital content and applications, continued growth in its customer base of iPod and iPhone 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.” (I don’t want to add up how much I’ve spent on apps since July, when I started using the iPhone 3GS.) Overall, music-related products and services, which includes non-music content like Apps and video, rose $696 million, or 21 percent, to $4.036 billion.

R&D: Apple spent 20 percent more on R&D in 2009—another $224 million for a total of $1.3 billion. Most of that increase came from a higher headcount and higher stock-based compensation. Sorry, no line item for amount spent on an Apple tablet.

Advertising: Apple spent $501 million—that’s half a billion—on advertising in 2009, up from $486 million in 2008 and $467 million in 2007.

Oct 27, 2009 6:40 PM ET

Apple's Steve Jobs Announces New iPod Line-up

Posted In: Entertainment, Music, Companies, Apple, iPhone

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  • DenzelWRal

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  • Nikolas L

    No doubt, Apple earnings were a home run. They have beaten its largest competitors in the market. The skyrocketing in Apple earnings is directly linked to the sale of iPhones, as it is far and away the most popular product.  The sales for iPods have begun to drop, although Mac sales are still pretty strong, which is surprising considering the popularity of netbooks over traditional laptops and desktops.  It's been one of the few huge corporations that haven't run home to the government for a bailout – though they aren't without critics.  Still – the <a rev="vote for" title="Apple Earnings Buck Recession Trends with 46 Percent Rise" href="http://personalmoneystore.com/moneyblog/2009/10/19/apple-earnings-buck-recession-trends-46-percent-rise/ ">Apple earnings</a> of the last year make it obvious that many consumers are still willing to get instant cash loans for Apple products.

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