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Apple beats Microsoft in fall quarterly earnings

post #1 of 39
Thread Starter 
This summer Apple only approached Microsoft in revenues, but in the fall quarter, the iPhone maker has handily beat its partner and rival after reporting a new record of $20.34 billion in revenues compared to Microsoft's $16.20 billion for the fall quarter.

In the spring, Apple surpassed Microsoft in market capitalization, which is the value placed on the company by its investors in the open market. But this quarter is the first time in a decade and a half that Apple has brought in more revenue.

In fact, Apple's new peak just above $20 billion in quarterly revenues surpassed Microsoft's best quarterly revenue performance ever, when the company just exceeded $19 billion in revenues.

Very different businesses

Apple's business is vastly different than Microsoft's, with most of the company's income coming from consumer hardware products, supported by growing sales of music and software.

Microsoft makes the majority of its revenues from licensing deals with PC makers and corporations (market segments where Apple is either weak or doesn't even seek to enter) and, conversely, has repeatedly failed to find much success in the competitive consumer markets Apple has done so well in over the past several years.

Microsoft reported that the biggest chunk of its quarterly earnings came from sales of Office within its Microsoft Business Division, which brought in $5.13 billion. The company's Windows & Windows Live division, historically the company's strongest leg, booked revenues of $4.79 billion.

The company's Server and Tools Business reported $3.55 billion, while its unprofitable Online Services Division (Bing) brought in 527 million and its Entertainment Devices Division (Xbox, Zune, Windows Phone) reported revenues of $1.8 billion.

In contrast, Apple reported $8.8 billion in revenue from iPhone, $2.8 billion from iPad, and $1.4 billion from iPod sales, $1.2 billion in music related products and services in iTunes, and about $1 billion in software, services, and peripherals, leaving about $4.9 billion in revenue from Macs (Apple's retail business accounted for $3.5 billion of those revenues).



Microsoft still ahead in profits

While Apple is now larger in market cap and revenues, Microsoft continues to make greater profit margins on its software-centric business than Apple does on its mostly hardware and retailing business. Microsoft reported quarterly profits of $5.41 billion compared to Apple's reported profits of $4.31 billion.

While Apple's competitive outmaneuvering of Microsoft's aspirations in smartphones, media devices and tablets humiliated the Zune and Tablet PC, and has left its Redmond-based rival scrambling to reinvent its sagging Windows Mobile platform as "Windows Phone," the two companies are also working together as partners.

Microsoft just delivered what most critics have described as the best version of Office ever released for Mac OS X, and has also launched new software intended to sync Windows Phones with iPhoto and iTunes on the Mac.

Apple and Microsoft have also acted in concert to derail the cheap netbook, with Apple diverting attention to its iPad and higher end MacBooks, while Microsoft independently announced plans to push PC makers toward higher priced targets, successfully converting cheap netbooks into more expensive low end notebooks.
post #2 of 39
That's a Rounding Error...
post #3 of 39
Apple has surpassed Microsoft in market capitalization.

Apple has surpassed Microsoft in revenue.

Apple is within range of Microsoft in profit.

What does this say about the mantra of the trolls who have now placed all their eggs in the market share basket? What does market share have to do with the value, revenue, and profits of a company? Can we even compare Apple to Microsoft anymore? Apple is a hardware company. Microsoft is a software company. Who's the irrelevant one if such a label even applies?
post #4 of 39
Quote:
Originally Posted by lkrupp View Post

Apple is a hardware company. Microsoft is a software company.

Apple makes software and hardware.
Microsoft makes software and hardware.

They are both tech companies.
post #5 of 39
Quote:
Originally Posted by OllieWallieWhiskers View Post

Apple makes software and hardware.
Microsoft makes software and hardware.

They are both tech companies.

Name me 1 computer, phone, tablet Microsoft makes. They don't even make the Zune, or XBox 360. Keyboards and mice are hardware but hardly in the same league as Apple's hardware.

Think about this though.

Microsoft makes $5.13 billion dollars profit based on mostly software sales. Apple has to make hardware and sells that hardware with minimal margins and yet makes $4.79 billion dollars profit. Apple makes ALL the hardware and yet is only something like $340 million less in profits.

It takes less to make software than it does to make hardware so even with Microsoft charging ludicrous prices for their software they are only a pittance more profitable than Apple.

Who really has the most value now.
post #6 of 39
Headline:

Apple beats Microsoft in fall quarterly earnings


Text:

Microsoft still ahead in profits



Seemingly, "earnings" and "profits" mean different things at AI?
post #7 of 39
Hey y'all.

The headline of this article is actually incorrect;
Earnings = profits, not revenues.

great site!
post #8 of 39
Quote:
Originally Posted by lowededwookie View Post

Apple ... sells that hardware with minimal margins

That's not really true. They make margins that are the envy of the industry.

Just saying.
post #9 of 39
Bill Gates not allowing Apple products in his household won't be enough to keep AAPL from kicking his ass. FInally he gets what he deserves.
post #10 of 39
Quote:
Originally Posted by AppleInsider View Post

Microsoft just delivered what most critics have described as the best version of Office ever released for Mac OS X, and has also launched new software intended to sync Windows Phones with iPhoto and iTunes on the Mac.

And yet a turd is still a turd, even if it doesn't smell like it.
post #11 of 39
Quote:
Originally Posted by lkrupp View Post

What does this say about the mantra of the trolls who have now placed all their eggs in the market share basket? What does market share have to do with the value, revenue, and profits of a company?

Exactly what I've been saying. Apple just needs to sell the iPhone for $1,000,000,000,000. Screw market share. Imagine the profits!
post #12 of 39
Quote:
Originally Posted by Steve-J View Post

Headline:

Apple beats Microsoft in fall quarterly earnings


Text:

Microsoft still ahead in profits



Seemingly, "earnings" and "profits" mean different things at AI?

Yes, it's amazing how many people think earnings are the same as revenues. That being said, it won't be too long before Apple surpasses Microsoft in earnings (i.e., net profits) as well. I'd give it about a year or a little more. First, it was the market cap, then revenues and, finally, it will be earnings.
post #13 of 39
Quote:
Originally Posted by DougDolde View Post

Bill Gates not allowing Apple products in his household won't be enough to keep AAPL from kicking his ass. FInally he gets what he deserves.

How is Apple hurting Bill Gates?

The person on the hot seat (and very deservedly so) is Steve Ballmer. Apple eclipsed MS under his watch.
post #14 of 39
Yeah, I don't know the difference between earnings and revenue either. Me and AI, best buds!
post #15 of 39
Quote:
Originally Posted by sippincider View Post

How is Apple hurting Bill Gates?

The person on the hot seat (and very deservedly so) is Steve Ballmer. Apple eclipsed MS under his watch.

I'm sure how Apple is doing compared to Microsoft is hurting his pride.

Yes, Ballmer is definitely in the hot seat but I don't think it's all his fault. Microsoft has a culture that's hellbent on protecting its Windows/Office monopoly franchise and you can't blame them for it. It's obscenely profitable, so they naturally develop a defensive mechanism against anything that could threaten that franchise. Microsoft has become a victim of its own success.
post #16 of 39
Oh please...As much as I find Ballmer painful to look at and to listen to, Apple would have had the same success if Gates had stayed on as Microsoft's chief.

Anyone remember the D5 "All-digital conference" in 1H 07 where Walt Mossberg interviewed both Bill Gates and Steve Jobs, which occurred shortly before the release of the initial iPhone? I wish they would do one now after Apple's onslaught of successes, which is, of course, ongoing, and for all we know, Apple's stock price will double again in the three years. It might go a little differently today.

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post #17 of 39
Quote:
Originally Posted by shadash View Post

Exactly what I've been saying. Apple just needs to sell the iPhone for $1,000,000,000,000. Screw market share. Imagine the profits!

If Apple can do one of those even just every couple of years, the stock would be in the stratosphere. It would be a screaming buy at $305.
post #18 of 39
Quote:
Originally Posted by lkrupp View Post

Apple has surpassed Microsoft in market capitalization.

Apple has surpassed Microsoft in revenue.

Apple is within range of Microsoft in profit.

What does this say about the mantra of the trolls who have now placed all their eggs in the market share basket? What does market share have to do with the value, revenue, and profits of a company? Can we even compare Apple to Microsoft anymore? Apple is a hardware company. Microsoft is a software company. Who's the irrelevant one if such a label even applies?

No arguments from me! Good points!

Best
post #19 of 39
Quote:
Originally Posted by AppleInsider View Post

In the spring, Apple surpassed Microsoft in market capitalization ......

I remember that day well.

May 26, 2010. Apple ended the day at a mkt cap of $221B, and MSFT at $219B.

And, as an indicator of continuing trends, five months later -- almost to the day -- Apple closed the day today at a mkt cap of $280B (+$59B), MSFT at $227B (+$6B).
post #20 of 39
Quote:
Originally Posted by DougDolde View Post

Bill Gates not allowing Apple products in his household won't be enough to keep AAPL from kicking his ass. FInally he gets what he deserves.

I agree, not to pile on...But MS has been notorious for putting out inferior sw and then looking at the customer complaints to figure out what the top five problems they need to address are.

Me being up till 3am wondering why my windows 98 won't upgrade is not acceptable. Only to find out 4 days later I need a driver for my modem...And it was a frigg'n windows engineer doing the upgrade for me! Good times!

MS lost me as a customer a long, long time ago. I will never, ever go back to a windows product! I won't even buy Office for the mac...and as I understand it, it's been mainly designed by Mac guys!

No MS on my Mac, ever!


Best
post #21 of 39
Let’s keep in mind that MS broke several of its own records this quarter and beat the street again, including 51% YoY net profit increase. In an odd twist of numbers, Apple bested Apple’s revenue by ≈25% but MS bested Apple’s net profit by ≈25%.

Even with such a negative mindshare these days MS is still a very strong and powerful company. While I expect Apple to beat MS’ net profit within the next couple quarters MS is and will be a force to be reckoned with for a long time to come.
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post #22 of 39
Quote:
Originally Posted by lowededwookie View Post

They don't even make the Zune, or XBox 360.

How is this different from Foxconn making the iPhone for Apple? It's not Steve Jobs and his merry elves making Apple's hardware.
post #23 of 39
Quote:
Originally Posted by lkrupp View Post

Can we even compare Apple to Microsoft anymore? Apple is a hardware company. Microsoft is a software company. Who's the irrelevant one if such a label even applies??

This stuff is of vital importance to the low ranking employees at Apple. Each bit of good news means one less pleb that gets a crafty hallway ninja-punch to the throat by Jobs.
post #24 of 39
Quote:
Originally Posted by dazweeja View Post

How is this different from Foxconn making the iPhone for Apple? It's not Steve Jobs and his merry elves making Apple's hardware.

What he means is that Apple designs all their products, which i assume you knew but are just being argumentative. To ‘make’ your own products doesn’t mean that a company like Apple would have to mine their own aluminium using Apple employees and so on until it becomes a Mac. T

MS may design their own HW now but I know the original Zune was at least a rebranded Creative Zen, with a slightly different appearance. That’s not designing your own product. Apple makes their own products, they don’t simply buy someone else’s product and put their logo on it.
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post #25 of 39
Quote:
Originally Posted by dazweeja View Post

How is this different from Foxconn making the iPhone for Apple? It's not Steve Jobs and his merry elves making Apple's hardware.

Apple's software does not run Foxconn-branded hardware.

Actually, let me take that a step further: with the exception of those that are given away -- e.g., iTunes, Safari -- Apple's software does not run on non-Apple hardware.

Spot the difference?
post #26 of 39
Quote:
Originally Posted by anantksundaram View Post

with the exception of those that are given away -- e.g., iTunes, Safari -- Apple's software does not run on non-Apple hardware.

Not legally anyway
post #27 of 39
Quote:
Originally Posted by anantksundaram View Post

Apple's software does not run Foxconn-branded hardware.

Actually, let me take that a step further: with the exception of those that are given away -- e.g., iTunes, Safari -- Apple's software does not run on non-Apple hardware.

Spot the difference?

What about MobileMe?
post #28 of 39
Quote:
Originally Posted by solipsism View Post

What he means is that Apple designs all their products, which i assume you knew but are just being argumentative. To make your own products doesnt mean that a company like Apple would have to mine their own aluminium using Apple employees and so on until it becomes a Mac. T

MS may design their own HW now but I know the original Zune was at least a rebranded Creative Zen, with a slightly different appearance. Thats not designing your own product. Apple makes their own products, they dont simply buy someone elses product and put their logo on it.

Either way the original comment is off. The Zune and the XBox are Microsoft branded, so in the context of this discussion Microsoft makes hardware. Ask anyone on the street, who makes XBoxes are they going to tell you it's XX design company and YY Chinese factory? You people are just being silly.
post #29 of 39
Quote:
Originally Posted by cameronj View Post

What about MobileMe?

MobileMe is a web-based service. If you are referring to the app, that is free, though of course will only be able to sync to the MobileMe servers with an active account.


Quote:
Originally Posted by tarZen View Post

Ask anyone on the street, who makes XBoxes are they going to tell you it's XX design company and YY Chinese factory?

Um, yeah, thats why companies forego any engineering efforts and only brand a product.
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post #30 of 39
Quote:
Originally Posted by Crunch View Post

Oh please...As much as I find Ballmer painful to look at and to listen to, Apple would have had the same success if Gates had stayed on as Microsoft's chief.

Anyone remember the D5 "All-digital conference" in 1H 07 where Walt Mossberg interviewed both Bill Gates and Steve Jobs, which occurred shortly before the release of the initial iPhone? I wish they would do one now after Apple's onslaught of successes, which is, of course, ongoing, and for all we know, Apple's stock price will double again in the three years. It might go a little differently today.

Actually MS released Windows 7, Windows 2008 R2 and Windows Phone 7 under Ballmer... some of their best products ever.

Vista was Gates child, such as Windows Mobile 6.x. And it took MS ages to move from XP and Server 2003 under Gates.

I can't see Gates was leading MS better than Ballmer in the last decade.
post #31 of 39
Quote:
Originally Posted by nikon133 View Post

Actually MS released Windows 7, Windows 2008 R2 and Windows Phone 7 under Ballmer... some of their best products ever.

Vista was Gates child, such as Windows Mobile 6.x. And it took MS ages to move from XP and Server 2003 under Gates.

I can't see Gates was leading MS better than Ballmer in the last decade.


I agree. Gates' success, such as it was, happened more because of competitors' missteps than Gates' execution. Windows 7 isn't a bad product, Windows Phone 7 looks to be decent. Gates was wrong over and over again in his "vision" of the future. But its still hard to criticize the guy now that he is doing so much good.
post #32 of 39
Quote:
Originally Posted by nikon133 View Post

Actually MS released Windows 7, Windows 2008 R2 and Windows Phone 7 under Ballmer... some of their best products ever.

Vista was Gates child, such as Windows Mobile 6.x. And it took MS ages to move from XP and Server 2003 under Gates.

I can't see Gates was leading MS better than Ballmer in the last decade.


Agree. The most irony is all this Apple's success happened when Windows 7 is the best Windows yet. The problem Microsoft faces is that their customers have no brand loyalty.. at all. Even with their best product the customers still look elsewhere.
post #33 of 39
Quote:
Originally Posted by matrix07 View Post

Agree. The most irony is all this Apple's success happened when Windows 7 is the best Windows yet. The problem Microsoft faces is that their customers have no brand loyalty.. at all. Even with their best product the customers still look elsewhere.

Well, that's the beauty of competition
post #34 of 39
Quote:
Originally Posted by solipsism View Post

Lets keep in mind that MS broke several of its own records this quarter and beat the street again, including 51% YoY net profit increase. In an odd twist of numbers, Apple bested Apples revenue by ≈25% but MS bested Apples net profit by ≈25%.

Even with such a negative mindshare these days MS is still a very strong and powerful company. While I expect Apple to beat MS net profit within the next couple quarters MS is and will be a force to be reckoned with for a long time to come.

Seconded.

Has anyone ever stopped to think exactly what physical commodity in the tangible world a software company actually sells to its customer?

Incredible - just a series of areas of high magnetic density (representing a logic "1") and low magnetic density (logic "0") on an inexpensive storage medium (CD/DVD/Digital download).

Compare that to your average Industrial Revolution era enterprise - Shipbuilding, the Oil Industry, Steelworks, Mining... and compare the relative earnings (well, leaving oil out).

We are slowly but surely entering the era of Mental Technology, where gigantically tangible services, revenues and profits will be made off completely intangible, invisible products and processes.

The dawning of the Age of Aquarius.
post #35 of 39
Quote:
Originally Posted by airmanchairman View Post

We are slowly but surely entering the era of Mental Technology, where gigantically tangible services, revenues and profits will be made off completely intangible, invisible products and processes.

The dawning of the Age of Aquarius.

Consider this, Throughout most of human history the elderly were revered for their knowledge and ability pass down the history even though they could no longer contribute physically to society. The move to recorded history changed that to an extent, but with the Internet and computers its really been altered as exact records of audio, video and original texts can be saved and recalled almost immediately. Where does that leave our our aging society? How will any effects be compounded by the ever increasing methods to keep the senescent population living longer, thus increasing the number of retirees each year?
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post #36 of 39
Quote:
Originally Posted by Steve-J View Post

Headline:

Apple beats Microsoft in fall quarterly earnings


Text:

Microsoft still ahead in profits



Seemingly, "earnings" and "profits" mean different things at AI?

I would think earnings involves ALL the money made from selling products to the consumer. Profits means what remains when you take away production cost.
post #37 of 39
Quote:
Originally Posted by solipsism View Post

Where does that leave our our aging society? How will any effects be compounded by the ever increasing methods to keep the senescent population living longer, thus increasing the number of retirees each year?

In the US they will be sent to retirement homes and cared for by the seemingly endless supply of illiterate, unskilled, foreigners earning minimum wage while our government subsidizes the expense for all of their childcare.

We have plenty of money to go around. Not to worry. 200 million for an air defense radar system given to Pakistan, 1.7 billion to defense contractors to build cruise missiles. Just one smallish bomb costs $10,000. Healthcare, education, pollution, repair of infrastructure, protecting our borders, forget about it. Why waste money on useless stuff like that?

Life is too short to drink bad coffee.

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post #38 of 39
Quote:
Originally Posted by mstone View Post

In the US they will be sent to retirement homes and cared for by the seemingly endless supply of illiterate, unskilled, foreigners earning minimum wage while our government subsidizes the expense for all of their childcare.

We have plenty of money to go around. Not to worry. 200 million for an air defense radar system given to Pakistan, 1.7 billion to defense contractors to build cruise missiles. Just one smallish bomb costs $10,000. Healthcare, education, pollution, repair of infrastructure, protecting our borders, forget about it. Why waste money on useless stuff like that?

I was just passing by people running a drive to raise money for St Jude's Children's Hospital. On the surface a noble enterprise but then it occurred to me... Why is the US the only first world country where you need a charity to help save children's lives? Why, like all other first world countries, aren't all children covered free of charge? ... Oh yes, I forgot that's considered communist here.
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Long on AAPL so biased. Strong advocate for separation of technology and politics on AI.
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post #39 of 39
Quote:
Originally Posted by digitalclips View Post

Why, like all other first world countries, aren't all children covered free of charge? ... Oh yes, I forgot that's considered communist here.

Funny how that scoialist/communist term doesnt work the same way when you apply it to Social Security benefits for the retired. Then the argument is that its not enough.
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