Apple Reports First Quarter Profit of $38 Million

CUPERTINO, California-January 16, 2002-Apple=AE today announced financial
results for its fiscal 2002 first quarter ended December 29, 2001. For the
quarter, the Company posted a net profit of $38 million, or $.11 per
diluted share. These results compare to a net loss of $195 million, or $.58
per diluted share, in the year ago quarter. Revenues for the quarter were
$1.38 billion, up 37 percent from the year ago quarter, and gross margins
were 30.7 percent, compared to -2.1 percent in the year ago quarter.
International sales accounted for 48 percent of the quarter’s revenues.

The quarter’s results included a $24 million restructuring charge related
to targeted reductions in the Company’s operations, information systems and
administrative functions, and a $23 million realized gain from equity
investments. These non-recurring items had a net neutral impact on reported
earnings per share.

Apple shipped 746 thousand Macintosh=AE units during the quarter.

“Apple delivered a solid quarter and is one of the few companies making a
profit in personal computers during these challenging times,” said Steve
Jobs, Apple’s CEO. “During last quarter we continued our strategy of
innovation. We launched the wildly popular iPod and sold more than 125,000
of them in two months. And we ended the year with 27 Apple retail stores
that attracted over 800,000 visitors in the month of December alone.”

“We’re pleased to have delivered healthy results while maintaining lean
channel inventories in a very challenging environment,” said Fred Anderson,
Apple’s CFO. “Our balance sheet remains very strong, with almost $4.4
billion in cash. We are targeting March quarter revenues to be up
sequentially to about $1.5 billion and EPS to be approximately flat with
the December quarter.”

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 Q1 2002 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 2:30 p.m. PST on Wednesday, January 16, 2002 at
http://www.apple.com/quicktime/qtv/earningsq102/ and will also be available
for replay. The QuickTime player is available free for Macintosh and
Windows users at www.apple.com/quicktime.