All-Time Record Revenue
Earnings Increase 78 Percent

Apple sold 3.47 million Macs during the quarter, representing a new quarterly record and a 33 percent unit increase over the year-ago quarter. The Company sold 8.4 million iPhones in the quarter, representing 61 percent unit growth over the year-ago quarter. Apple sold 9.41 million iPods during the quarter, representing an eight percent unit decline from the year-ago quarter. The Company began selling iPads during the quarter, with total sales of 3.27 million.

"It was a phenomenal quarter that exceeded our expectations all around, including the most successful product launch in Apple's history with iPhone 4,"
said Steve Jobs, Apple's CEO. "iPad is off to a terrific start, more people are buying Macs than ever before, and we have amazing new products still to come this year."

"We're really pleased to have generated over $4 billion of cash during the quarter," said Peter Oppenheimer, Apple's CFO. "Looking ahead to the fourth fiscal quarter of 2010, we expect revenue of about $18 billion and we expect diluted earnings per share of about $3.44"

Apple will provide live streaming of its Q3 2010 financial results conference call beginning at 2:00 p.m. PDT on July 20, 2010 at www.apple.com/quicktime/qtv/earningsq310/. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those 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 without limitation 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; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company's gross margin; the inventory risk associated with the Company's need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company's business currently obtained by the Company from sole or limited sources; 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 reliance on the availability of third-party digital content and applications; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company's dependency on the performance of distributors and other resellers of the Company's products; the effect that product and service quality problems could have on the Company's sales and operating profits; the Company's reliance on sole service providers for iPhone in certain countries; the continued service and availability of key executives and employees; war, terrorism, public health issues, and other circumstances that could disrupt supply, delivery, or demand of products; potential litigation from the matters investigated by the special committee of the board of directors and the restatement of the Company's consolidated financial statements; and unfavorable results of other legal proceedings.

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, as amended, for the fiscal year ended September 26, 2009, its Forms 10-Q for the quarters ended December 26,
2009 and March 27, 2010, and its Form 10-Q for the quarter ended June 26, 2010 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.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork, and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple reinvented the mobile phone with its revolutionary iPhone and App Store, and has recently introduced its magical iPad which is defining the future of mobile media and computing devices.

2010 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS, Macintosh and iPhone are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except share amounts which are reflected in thousands
and per share amounts)

Three Months Ended Nine Months Ended
------------------ -----------------
June 26, June 27, June 26, June 27,
2010 2009 2010 2009
--------- --------- ---------

Net sales $15,700 $9,734 $44,882 $30,698
Cost of sales (1) 9,564 5,751 26,710 18,581
----- ----- ------ ------

Gross margin 6,136 3,983 18,172 12,117
----- ----- ------ ------

Operating expenses:
Research and
development (1) 464 341 1,288 975
Selling, general and
administrative (1) 1,438 1,010 3,946 3,086
----- ----- ----- -----

Total operating
expenses 1,902 1,351 5,234 4,061
----- ----- ----- -----

Operating income 4,234 2,632 12,938 8,056

Other income and
expense 58 60 141 281
--- --- --- ---

Income before
provision for
income taxes 4,292 2,692 13,079 8,337

Provision for income
taxes 1,039 864 3,374 2,634
----- --- ----- -----

Net income $3,253 $1,828 $9,705 $5,703
====== ====== ====== ======

Earnings per common
share:
Basic $3.57 $2.05 $10.69 $6.40
Diluted $3.51 $2.01 $10.51 $6.30

Shares used in
computing earnings
per share:
Basic 912,197 893,712 907,762 891,345
Diluted 927,361 909,160 923,341 904,549

(1) Includes stock-
based compensation
expense as follows:
Cost of sales $38 $28 $112 $85
Research and
development $80 $65 $240 $192
Selling, general and
administrative $101 $86 $303 $253

Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share amounts)

September 26,
June 26, 2010 2009
------------- --------------

ASSETS:

Current assets:
Cash and cash equivalents $9,705 $5,263
Short-term marketable securities 14,583 18,201
Accounts receivable, less allowances
of $52 in each period 3,447 3,361
Inventories 942 455
Deferred tax assets 1,216 1,135
Vendor non-trade receivables 2,952 1,696
Other current assets 3,188 1,444
----- -----
Total current assets 36,033 31,555

Long-term marketable securities 21,551 10,528
Property, plant and equipment, net 3,990 2,954
Goodwill 714 206
Acquired intangible assets, net 318 247
Other assets 2,119 2,011
----- -----
Total assets $64,725 $47,501
======= =======

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable $8,469 $5,601
Accrued expenses 4,452 3,852
Deferred revenue 2,691 2,053
----- -----
Total current liabilities 15,612 11,506

Deferred revenue - non-current 1,021 853
Other non-current liabilities 4,981 3,502
----- -----
Total liabilities 21,614 15,861
------ ------

Commitments and contingencies

Shareholders' equity:
Common stock, no par value;
1,800,000,000 shares 10,133 8,210
authorized; 913,482,347 and
899,805,500 shares issued
and outstanding, respectively
Retained earnings 32,870 23,353
Accumulated other comprehensive
income 108 77
--- ---
Total shareholders' equity 43,111 31,640
------ ------

Total liabilities and shareholders'
equity $64,725 $47,501
======= =======

Apple Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

Nine Months Ended
-----------------
June 26,
2010 June 27, 2009
--------- -------------

Cash and cash equivalents,
beginning of the period $5,263 $11,875
------ -------

Operating activities:
Net income 9,705 5,703
Adjustments to reconcile net
income to cash generated by
operating activities:
Depreciation, amortization and
accretion 698 531
Stock-based compensation
expense 655 530
Deferred income tax expense 1,298 772
Loss on disposition of
property, plant and equipment 14 18
Changes in operating assets
and liabilities:
Accounts receivable, net (79) (264)
Inventories (487) 129
Vendor non-trade receivables (1,256) 788
Other current assets (944) 62
Other assets (71) (602)
Accounts payable 2,812 (648)
Deferred revenue 806 323
Other liabilities (239) (293)
---- ----

Cash generated by operating
activities 12,912 7,049
------ -----

Investing activities:
Purchases of marketable
securities (41,318) (34,696)
Proceeds from maturities of
marketable securities 19,758 12,780
Proceeds from sales of
marketable securities 14,048 9,117
Purchases of other long-term
investments (10) (61)
Payments made in connection
with business acquisitions,
net of cash acquired (615) -
Payments for acquisition of
property, plant and equipment (1,245) (685)
Payments for acquisition of
intangible assets (63) (56)
Other (26) (62)
--- ---

Cash used in investing
activities (9,471) (13,663)
------ -------

Financing activities:
Proceeds from issuance of
common stock 733 288
Excess tax benefits from
stock-based compensation 652 124
Taxes paid related to net
share settlement of equity
awards (384) (68)
---- ---

Cash generated by financing
activities 1,001 344
----- ---

Increase/(decrease) in cash
and cash equivalents 4,442 (6,270)
----- ------

Cash and cash equivalents, end
of the period $9,705 $5,605
====== ======

Supplemental cash flow
disclosure:
Cash paid for income taxes,
net $2,657 $2,490

Apple Inc.
Q3 2010 Unaudited Summary Data

Q2 2010 Q3 2009 Q3 2010
------- ------- -------

Operating
Segments CPU Revenue CPU Revenue CPU Revenue
Units K $M Units K $M Units K $M
------- --- ------- --- ------- ---
Americas 971 $4,993 1,147 $4,474 1,358 $6,227
Europe 899 4,050 626 2,505 914 4,160
Japan 129 887 108 560 129 910
Asia Pacific 338 1,886 230 703 394 1,825
Retail 606 1,683 492 1,492 677 2,578

Total
Operating
Segments 2,943 $13,499 2,603 $9,734 3,472 $15,700
===== ======= ===== ====== ===== =======

Product
Summary Units K Revenue Units K Revenue Units K Revenue
------- $M ------- $M ------- $M
--- --- ---
Desktops (1) 1,147 $1,532 849 $1,134 1,004 $1,301
Portables (2) 1,796 2,228 1,754 2,220 2,468 3,098
----- ----- ----- ----- ----- -----
Subtotal CPUs 2,943 3,760 2,603 3,354 3,472 4,399
iPod 10,885 1,861 10,215 1,492 9,406 1,545
Other Music
Related
Products and
Services (3) 1,327 958 1,214
iPhone and
Related
Products and
Services (4) 8,752 5,445 5,208 3,060 8,398 5,334
iPad and
Related
Products and
Services (5) 0 0 0 0 3,270 2,166
Peripherals
and Other
Hardware 472 340 396
Software,
Service and
Other Sales 634 530 646
--- --- ---
Total Apple $13,499 $9,734 $15,700
======= ====== =======

Sequential
Change Year/Year Change
---------- ----------------
Operating Segments CPU Revenue CPU Revenue
Units ------- Units -------
----- -----
Americas 40% 25% 18% 39%
Europe 2% 3% 46% 66%
Japan 0% 3% 19% 63%
Asia Pacific 17% - 3% 71% 160%
Retail 12% 53% 38% 73%

Total Operating Segments 18% 16% 33% 61%

Sequential
Change Year/Year Change
----------- ----------------
Product Summary Units Revenue Units Revenue
----- ------- ----- -------
Desktops (1) - 12% - 15% 18% 15%
Portables (2) 37% 39% 41% 40%
Subtotal CPUs 18% 17% 33% 31%
iPod - 14% - 17% - 8% 4%
Other Music Related Products and
Services (3) - 9% 27%
iPhone and Related Products and
Services (4) - 4% - 2% 61% 74%
iPad and Related Products and
Services (5) N/M N/M N/M N/M
Peripherals and Other Hardware - 16% 16%
Software, Service and Other Sales 2% 22%
Total Apple 16% 61%

(1) Includes iMac, Mac mini, Mac Pro and Xserve product lines.
(2) Includes MacBook, MacBook Air and MacBook Pro product lines.
(3) Consists of iTunes Store sales, iPod services, and Apple-
branded and third-party iPod accessories.
(4) Units consist of iPhone handset sales; Revenue is derived from
handset sales, carrier agreements, and Apple-branded and third-
party iPhone accessories.
(5) Includes iPad sales, services, and Apple-branded and third-
party iPad accessories.

N/M: Not Meaningful K = Units in thousands
$M = Amounts in millions

SOURCE Apple