Apple Reports Fourth Quarter Profit of $66 Million

CUPERTINO, California-October 17, 2001-Apple=AE today announced financial
results for its fiscal 2001 fourth quarter ended September 29, 2001. For
the quarter, the Company posted a net profit of $66 million, or $.19 per
diluted share. These results compare to a net profit of $170 million, or
$.47 per diluted share, achieved in the year ago quarter. Revenues for the
quarter were $1.45 billion, down 22 percent from the year ago quarter, and
gross margins were 30.1 percent, compared to 25.0 percent in the year ago
quarter. International sales accounted for 41 percent of the quarter’s

The quarter’s results included a $1 million favorable after-tax impact
resulting from realized investment gains. Excluding these gains, the
Company’s net profit for the quarter would have been $65 million, or $.18
per diluted share.

Apple shipped 850 thousand Macintosh=AE units during the quarter.

“We accomplished a lot in FY 2001, even though it was a challenging year
for us and our industry,” said Steve Jobs, Apple’s CEO. “We gained market
share in education, and iBook sales to education tripled last quarter; we
launched Mac OS X, and released the stunningly fast 10.1 update in
September; we opened our first Apple retail stores, and are on track to
open 25 stores across the U.S. by the end of 2001.”

“We’re pleased to have delivered solid results while maintaining lean
channel inventories in a very challenging environment,” said Fred Anderson,
Apple’s CFO. “Our balance sheet remains very strong, with over $4.3 billion
in cash. Given the uncertain global political environment and weak economy,
we are targeting December quarter revenues of at least $1.4 billion and EPS
of at least $.10.”

For the year, the Company reported a net loss of $25 million on revenues o=
$5.36 billion, compared to net earnings of $786 million on $7.98 billion in
revenues in 2000.

Apple ignited the personal computer revolution in the 1970s with the Apple
II and reinvented the personal computer in the 1980s with the Macintosh.
Apple is committed to bringing the best personal computing experience to
students, educators, creative professionals and consumers around the world
through its innovative hardware, software and Internet offerings.

Apple will provide live streaming of its Q4 2001 financial results
conference call utilizing QuickTime=AE, Apple’s standards-based technology
for live and on-demand audio and video streaming.

The live webcast will begin at 2 p.m. PDT on Wednesday, October 17, 2001 at and will also be available
for replay. The QuickTime player is available free for Macintosh and
Windows users at

Except for the historical information contained herein, the statements in
this press release are forward-looking statements that involve risks and
uncertainties. Potential risks and uncertainties include, without
limitation, continued competitive pressures in the marketplace; the effect
competitive and economic factors and the Company’s reaction to them may
have on consumer and business buying decisions with respect to the
Company’s products; the ability of the Company to make timely delivery of
new programs, products and successful technological innovations to the
marketplace; the continued availability of certain components and services
essential to the Company’s business currently obtained by the Company from
sole or limited sources; possible disruption in commercial activities
caused by terrorist activity and armed conflict, such as changes in
logistics and security arrangements, and reduced end-user purchases
relative to expectations; and the ability of the Company to successfully
evolve its operating system. 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-Q for the quarter ended June 30, 2001, and the Company’s Form 10-K
for the 2001 fiscal year to be filed with the SEC.