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CORRESP
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  Apple Computer, Inc.

  August 17, 2006

  1 Infinite Loop

  Cupertino, CA 95014

  To:

  Kathleen Collins

  Accounting Branch Chief

  United States Securities and Exchange Commission

  Division of
  Corporation Finance

  100 F Street, N.E.

  Washington, D.C. 20549

  Re:

  Apple Computer, Inc. (File No. 000-10030)

  Form 10-K: For the Fiscal Year Ended September 24,
  2005, Filed November 30, 2005

  Form 8-K: Filed October 11, 2005

  Form 8-K: Filed January 18, 2006

  Form 8-K: Filed April 19, 2006

  Form 8-K: Filed July 19, 2006

  Form 8-K: Filed August 3, 2006

Dear Ms. Collins,

We have reviewed
the questions in your letter dated August 8, 2006 regarding the above
referenced filings and have provided the attached responses. We have repeated
the text of your questions and followed each with our response.

Further, we acknowledge
that:

1.              Apple Computer, Inc.
(the “Company”) is responsible for the adequacy and accuracy of the disclosure
in the filings referenced above;

2.
            Staff comments or
changes to disclosure in response to staff comments do not foreclose the
Commission from taking any action with respect to the filings referenced above;
and

3.
            The Company may not
assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.

If you have any
questions regarding our responses, you may contact me at (408) 974-6614 or Joel
Greenberg, Senior Director of Technical Accounting and External Reporting, at
(408) 974-1888.

  Very truly yours,

  /s/ Peter Oppenheimer

  Peter Oppenheimer

  Senior Vice President

  and Chief Financial Officer

Form 10-K for the year
ended September 24, 2005

Note 11 — Segment Information and Geographic Data,
page 92

1.              We note in your disclosure that you
manage your business primarily on a geographic basis. Please tell us whether
you manage and evaluate your business based on other operating segments
financial results (consumer electronics, type of product, gross margin by
products, operating results within geographic regions by product etc.) and if
so, help us understand why these do not represent separate reportable segments
under SFAS 131. Explain to us the financial information, in addition to
geographic and retail segments, your Chief Operating Decision Maker uses to
make decisions about resource allocation and performance assessment and clarify
if you have aggregated any operating segments.

In accordance with SFAS
131, the Company reports segment information based on the “management”
approach. As noted in paragraph 4 of SFAS 131, “The management approach is
based on the way that management organizes the segments within the enterprise
for making operating decisions and assessing performance.” Based on the
management approach, the Company determined its operating segments, which are
generally based on the nature and location of its customers, consist of the
Americas, Europe, Japan, Asia-Pacific, Retail and FileMaker operations. The
Company’s four geographical segments together with the Retail segment all sell
the same products to the same types of customers.

As explained in Parts I
and II of the Company’s Form 10-K, the Company’s strategy is to design and
develop innovative products and services that are interoperable. The Company
uses its skills in hardware and software design, and its ability to integrate other
technologies such as communications, to provide innovative and seamlessly
integrated products to its customers. The Company believes the personal
computer acts as the digital hub for advanced digital devices, such that the
Company’s offerings work together seamlessly and are generally an extension of
the personal computer. Therefore, the development of the Company’s strategy, as
well as its research and development and corporate marketing functions, are
centralized to ensure products are interoperable and a unified execution of the
Company’s strategy occurs. As a result, the Company is organized functionally
such that no single individual or functional group has overall responsibility
for a product throughout its entire lifecycle, from concept to production to
sales and marketing and service. Rather, members of management are responsible
for their functional areas such as research and development, manufacturing,
marketing, sales, and general and administrative functions. The Company’s sales
personnel are responsible for selling all of the Company’s products and other
offerings to the customer base in their assigned geography, as opposed to
having separate sales personnel for different products. Additionally, the
Company has operational support organizations in each geography and for its
retail stores to support customer order management, logistics and service for
all products. Functional leaders, including those overseeing hardware
engineering, operating system and applications development, manufacturing, and
general and administrative functions, are compensated based on the revenue and
operating margin results of the entire Company, whereas geographic general
managers’ and their sales leaders’ compensation is tied to their sales results.
No group is compensated on individual product sales or profitability, and the
Company does not report full financial statements by product.

There are two exceptions
to the Company’s functional-based organizational structure, the Company’s
Retail operations and its FileMaker subsidiary.

As noted in the
Company’s Form 10-K, the Company’s worldwide retail operations, which sell all
of the Company’s products, are evaluated based on a measure comparable to the
Company’s major channel partners in the U.S. operating retail stores so the
Company can evaluate the Retail segment performance as if it were a channel
partner. Substantially all of the operations of the Retail segment are managed
by the Retail segment manager; furthermore, employees working in the Retail
segment generally report to the segment manager as opposed to a functional
leader, and are compensated based on the specific results of the Retail
segment. Geographic operating segment managers are neither responsible for, nor
compensated on, the results of the Retail segment.

 2

The Company’s FileMaker
subsidiary is run autonomously from the rest of the Company’s business and has
a President who is responsible for all aspects of the FileMaker business,
including product development, sales, and general and administrative functions,
including marketing activities. FileMaker employees’ compensation is tied to
the results of FileMaker’s operations.

As noted by paragraph
10(a) of SFAS 131, an operating segment engages in business activities that
earn revenues and incur expenses. Additionally, paragraph 10(b) and 10(c) of
SFAS 131 defines an operating segment as a component whose operating results
are regularly reviewed by the Chief Operating Decision Maker (the “CODM”),
which the Company has determined to be its Chief Executive Officer, to make
decisions about resources to be allocated and assess performance and for which
discrete financial information is available. The Company’s geographic
operations, along with its Retail and FileMaker operations, all meet the
criteria in paragraph 10 of SFAS 131, including the availability of discrete
financial information detailing sales and operating income, which are used to
assess performance and make resource allocation decisions. The Company
allocates resources such as discretionary marketing and advertising expenses,
capital expenditures, sales expenses, and commitments for new retail stores
based on its operating segments’ growth opportunities and results of
operations. In the process of allocating resources to research and development
activities, the Company primarily focuses on whether projects will contribute
to its overall corporate strategy of profitably expanding the digital hub
through the development of seamlessly integrated and interoperable products.

Additionally, paragraph
14 of SFAS 131 states, “If the characteristics in paragraph 10 apply to more
than one set of components of an organization but there is only one set for
which segment managers are held responsible, that set of components constitutes
the operating segments.” As segment managers are held responsible and
compensated for their segment’s operating results and no employees’
compensation is tied to specific product results, the Company has determined
the identified operating segments are appropriate.

In addition to
operating segment results, the CODM also receives the annual plan, the “WWW BBB
Report,” worldwide sell-through reporting, quarterly financial results for the
Company as a whole and by operating segment, and financial updates as periodically
presented to the Company’s Board of Directors. The annual plan summarizes the
Company level income statement, balance sheet, cash flow and operating expense
for segments and functional areas. The “WWW BBB Report” provides information on
weekly bookings and billings by operating segment and within each segment by
channel and product. The weekly sell-through reporting provides information on
unit sell-through by segment and product. The CODM receives quarterly financial
statements, related footnotes and management’s discussion and analysis which
highlights Company-wide and operating segment sales and operating results as
well as quarterly sales by product. In addition, the CODM receives information
related to periodic results and forecasts as included in presentations to the
Board of Directors that include items such as Company level income statements
and certain segment and product sales information (in units and dollars and
broken out by direct and indirect channels), gross margin by product line, market
share information, channel inventory, and Company level balance sheet and cash
flow information.

As discussed in
Note 11 to the consolidated financial statements included in the Form 10-K, the
Company evaluates the performance of its operating segments based on net sales,
as well as operating income performance for the Retail segment. The segment
managers, who are ultimately responsible for the performance of their segment,
review these results. The CODM evaluates the performance of the segments and allocates
resources based on their growth opportunities and operating results. The
additional information provided to the CODM as identified above is used
primarily to monitor Company-wide performance and ensure Company-wide
profitability targets are met, determine pricing, and manage inventory levels.
Additionally, no individual in the Company is held accountable for the
financial operating margin performance of individual products and/or product
lines, which is evidenced by the absence of any individual’s compensation tied
to the financial performance of specific products. Moreover, the CODM does not
receive reporting on specific product level operating margin profitability.

 3

Consistent with
the guidance provided in paragraph 4 of SFAS 131, the Company has determined
that its operating segments are properly identified as the Americas, Europe,
Japan, Asia-Pacific, Retail and FileMaker. Additionally, as noted above, the
Company’s segment managers are only held responsible for, and their compensation
tied to, the operating segment results. As noted in paragraph 14 of SFAS 131,
if there is only one segment for which segment managers are held responsible,
that set of components constitutes the operating segments, further supporting
the Company’s identification of its operating segments.

The Company aggregates
its Asia-Pacific and FileMaker operating segments in the “all other” category,
as disclosed in the Company’s Form 10-K and consistent with paragraph 21 of
SFAS 131, as neither of these segments is individually reportable. The Company
does not aggregate any of its other operating segments because management
believes the segment information as currently segregated is useful to the
readers of its financial statements.

The Company also
provides information regarding net sales of products and services, as well as
by geographic area, in accordance with paragraphs 37 and 38 of SFAS 131. The
Company’s disclosures include information for its major products and services,
thereby assisting users of the Company’s financial statements in their
assessment of both past performance and prospects for future growth based on an
analysis of trends in revenue. Consistent with paragraph 3 of SFAS 131, the
Company believes its operating segment disclosures provide the information
management uses to assess the different types of business activities in which
the Company engages and the different economic environments in which it
operates to help users of the financial statements better understand the
Company’s performance, assess its prospects for future net cash flows, and make
more informed judgments about the Company.

Forms 8-K filed October 11, 2005, January 18, 2006,
April 19, 2006 and July 19, 2006

2.              We note your use of non-GAAP measures
under Item 9.01 of the Form 8-Ks noted above which excludes a number of
recurring items.  Tell us how you
considered Question 8 of Frequently Asked Questions Regarding the Use of
Non-GAAP Financial Measures to include the following disclosures for each of
the non-GAAP measures you present (e.g. gross margin, operating expenses,
operating income, etc.):

·                    the manner in
which management uses the non-GAAP measure to conduct or evaluate its business;

·                    the economic
substance behind management’s decision to use such a measure;

·                    the material
limitations associated with use of the non-GAAP financial measure as compared
to the use of the most directly comparable GAAP financial measure;

·                    the manner in
which management compensates for these limitations when using the non-GAAP
financial measure; and

·                    the
substantive reasons why management believes the non-GAAP financial measure
provides useful information to investors.

In this regard, we believe you should further enhance
your disclosures for each non-GAAP measure presented to comply with Item
10(e)(1)(i)(C) and (D) of Regulation S-K and Question 8 of the related FAQ to
demonstrate the usefulness of your non-GAAP financial measures which excludes a
number of recurring items, especially since these measures appear to be used to
evaluate performance.  Your current
disclosures regarding the reasons for presenting these non-GAAP measures appear
overly broad considering that companies and investors may differ as to which
items warrant adjustment and what constitutes operating performance.

In assessing the
permissibility and appropriate disclosure of non-GAAP measures, the Company
considers guidance from the SEC’s June 13, 2003 Frequently Asked Questions
Regarding the Use of Non-GAAP Financial Measures (“FAQ”) and specifically
the guidance provided under Question 8.

 4

The Company’s
reconciliation of its non-GAAP to GAAP results of operations included in its
furnished Forms 8-K discloses the Company’s assessment of the usefulness of the
non-GAAP adjustments. The non-GAAP adjustments in the Forms 8-K filed January
18, 2006, April 19, 2006 and July 19, 2006 related only to non-cash stock-based
compensation expense and the associated income tax effect. As disclosed, the
Company uses these resulting non-GAAP measures when evaluating its financial
results as well as for preparing internal forecasts and plans. Additionally,
the Company’s management bonus programs are currently based on revenue and
operating margin targets that exclude non-cash stock-based compensation
expense. Finally, these non-GAAP measures also facilitate comparison of
operating results across reporting periods as prior years omit the effect of
expensing stock-based compensation