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Segment Information and Geographic Data | 12 Months Ended
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Sep. 26, 2015
Segment Information and Geographic Data | Note 11 – Segment Information and Geographic Data The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable operating segments. The Company manages its business primarily on a geographic basis. The Company’s reportable operating segments consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific. The Americas segment includes both North and South America. The Europe segment includes European countries, as well as India, the Middle East and Africa. The Greater China segment includes China, Hong Kong and Taiwan. The Rest of Asia Pacific segment includes Australia and those Asian countries not included in the Company’s other reportable operating segments. Although each reportable operating segment provides similar hardware and software products and similar services, they are managed separately to better align with the location of the Company’s customers and distribution partners and the unique market dynamics of each geographic region. The accounting policies of the various segments are the same as those described in Note 1, “Summary of Significant Accounting Policies.” The Company evaluates the performance of its reportable operating segments based on net sales and operating income. Net sales for geographic segments are generally based on the location of customers and sales through the Company’s retail stores located in those geographic locations. Operating income for each segment includes net sales to third parties, related cost of sales and operating expenses directly attributable to the segment. Advertising expenses are generally included in the geographic segment in which the expenditures are incurred. Operating income for each segment excludes other income and expense and certain expenses managed outside the reportable operating segments. Costs excluded from segment operating income include various corporate expenses such as R&D, corporate marketing expenses, certain share-based compensation expenses, income taxes, various nonrecurring charges and other separately managed general and administrative costs. The Company does not include intercompany transfers between segments for management reporting purposes. The following table shows information by reportable operating segment for 2015, 2014 and 2013 (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Americas: |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 93,864 |  |  | $ | 80,095 |  |  | $ | 77,093 |
Operating income |  | $ | 31,186 |  |  | $ | 26,158 |  |  | $ | 24,829 |
Europe: |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 50,337 |  |  | $ | 44,285 |  |  | $ | 40,980 |
Operating income |  | $ | 16,527 |  |  | $ | 14,434 |  |  | $ | 12,767 |
Greater China: |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 58,715 |  |  | $ | 31,853 |  |  | $ | 27,016 |
Operating income |  | $ | 23,002 |  |  | $ | 11,039 |  |  | $ | 8,499 |
Japan: |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 15,706 |  |  | $ | 15,314 |  |  | $ | 13,782 |
Operating income |  | $ | 7,617 |  |  | $ | 6,904 |  |  | $ | 6,668 |
Rest of Asia Pacific: |  |  |  |  |  |  |  |  |  |  |  |
Net sales |  | $ | 15,093 |  |  | $ | 11,248 |  |  | $ | 12,039 |
Operating income |  | $ | 5,518 |  |  | $ | 3,674 |  |  | $ | 3,762 |
A reconciliation of the Company’s segment operating income to the Consolidated Statements of Operations for 2015, 2014 and 2013 is as follows (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Segment operating income |  | $ | 83,850 |  |  | $ | 62,209 |  |  | $ | 56,525 |
Research and development expense |  |  | (8,067 | ) |  |  | (6,041 | ) |  |  | (4,475 | )
Other corporate expenses, net |  |  | (4,553 | ) |  |  | (3,665 | ) |  |  | (3,051 | )
Total operating income |  | $ | 71,230 |  |  | $ | 52,503 |  |  | $ | 48,999 |
The U.S. and China were the only countries that accounted for more than 10% of the Company’s net sales in 2015, 2014 and 2013. There was no single customer that accounted for more than 10% of net sales in 2015, 2014 or 2013. Net sales for 2015, 2014 and 2013 and long-lived assets as of September 26, 2015 and September 27, 2014 are as follows (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Net sales: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 81,732 |  |  | $ | 68,909 |  |  | $ | 66,197 |
China (1) |  |  | 56,547 |  |  |  | 30,638 |  |  |  | 25,946 |
Other countries |  |  | 95,436 |  |  |  | 83,248 |  |  |  | 78,767 |
Total net sales |  | $ | 233,715 |  |  | $ | 182,795 |  |  | $ | 170,910 |
|  | 2015 |  |  | 2014 |  |  |  |
Long-lived assets: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 12,022 |  |  | $ | 9,108 |  |  |  |  |
China (1) |  |  | 8,722 |  |  |  | 9,477 |  |  |  |  |
Other countries |  |  | 3,040 |  |  |  | 2,917 |  |  |  |  |
Total long-lived assets |  | $ | 23,784 |  |  | $ | 21,502 |  |  |  |  |
| (1) | China includes Hong Kong. Long-lived assets located in China consist primarily of product tooling and manufacturing process equipment and assets related to retail stores and related infrastructure. |
Net sales by product for 2015, 2014 and 2013 are as follows (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Net Sales by Product: |  |  |  |  |  |  |  |  |  |  |  |
iPhone (1) |  | $ | 155,041 |  |  | $ | 101,991 |  |  | $ | 91,279 |
iPad (1) |  |  | 23,227 |  |  |  | 30,283 |  |  |  | 31,980 |
Mac (1) |  |  | 25,471 |  |  |  | 24,079 |  |  |  | 21,483 |
Services (2) |  |  | 19,909 |  |  |  | 18,063 |  |  |  | 16,051 |
Other Products (1)(3) |  |  | 10,067 |  |  |  | 8,379 |  |  |  | 10,117 |
Total net sales |  | $ | 233,715 |  |  | $ | 182,795 |  |  | $ | 170,910 |
| (1) | Includes deferrals and amortization of related software upgrade rights and non-software services. |
| (2) | Includes revenue from the iTunes Store, App Store, Mac App Store, iBooks Store, Apple Music, AppleCare, Apple Pay, licensing and other services. |
| (3) | Includes sales of Apple TV, Apple Watch, Beats products, iPod and Apple-branded and third-party accessories. |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8906-108599 + Details
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