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Apple poised to beat Microsoft's quarterly profits for first time in 20 years

post #1 of 46
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Microsoft is expected to report lower profits than last year as PC market growth stalls, making it almost certain that Apple's latest $6 billion earnings record will exceed Microsoft's for the first time since 1990.

Microsoft is expected to report $5.93 billion over the winter quarter, according to a report by Reuters, although it's possible the company could post a blowout quarter that exceeds the street's expectations.

Just two years ago, Microsoft was posting twice the quarterly profits of Apple. Over the last few years however, Apple has established new markets in smartphones and with the iPad, two product segments Microsoft has failed to execute in.

The report cited Tim Bajarin, president of tech research firm Creative Strategies, as saying, "Microsoft is still a juggernaut in the PC business; Windows-based machines are still selling over 300 million a year. But they missed the smartphone revolution, and even though they were the first to really push the tablet, Apple basically redesigned it and left Microsoft in the dust."

Windows Phone fails to connect

Last year, Microsoft scrambled to scuttle Windows Mobile 6 and the mobile software marketplace for that platform that it had just finished, in order to launch an entirely new, incompatible mobile platform based on more modern technology, with an easy to use touch interface rather than a windowing interface requiring a keypad or stylus to navigate.

An interim product, launched with Verizon under the brand KIN, failed miserably. However, even sales of Windows Phone 7 have been disappointing, with even LG, one of Microsoft's leading WP7 licensees, referring to sales as "less than we expected."

LG's marketing strategy and planning team director James Choi observed that "for tech guys like us it might be a little bit boring after a week or two, but there are certain segments that it really appeals to. We strongly feel that it has a strong potential even though the first push wasnt what everyone expected."

Even Microsoft's developers took a dim view of the platform, with Justin James observing, "unless you consider Windows Phone 7 to be a 'must do' platform for development (which is quite unlikely), I suggest that you think of Windows Phone 7 development as a hobby or a learning experience rather than a source of revenue until the App Hub issues are sorted out."

In December Microsoft tried to frame sales of Windows Phone 7 as flatteringly as possible, referring to "phone manufacturer sales," defined as "phones being bought and stocked by mobile operators and retailers on their way to customers," as having reached a milestone of 1.5 million units, and saying this was "inline with our expectations."

That number was actually barely enough to fill Microsoft's well developed global channel. One reseller reported that the new WP7 models "are by and large generic phones from well known manufacturers, and in most cases an almost identical model is available from the same manufacturer with Android, and given the choice people seem to be picking Android."

Windows tablets flop

Hot on the heels of failed launch of last year's Slate PC initiative with HP, Microsoft killed the vaporware Courier project that many hoped would take on the iPad.

This year, the company promised to start over again, two years from now, with a version of Windows capable of running on the efficient chips of the ARM Architecture, just like last year's iPad and other Android tablet products hitting the market.

"I wish they did this [switch to ARM] two years ago, it's something they should have thought of," said Sid Parakh, analyst at McAdams Wright Ragen. "But it is a long game. The question becomes: Is the iPad a cannibalization of Microsoft's existing products, or an added component of consumer electronics spending? I'm sure it's a mix of both."

PC growth slower than predicted

Microsoft's bread and butter, the PC market, was up globally only 3.1 percent in the winter quarter, and US sales actually contracted by 6.6 percent according to figures reported by Gartner. Over all of 2010, PC shipments were up just 13.8 percent world wide, much lower than Gartner's original forecast for 2010 calling for 19.2 percent growth.

In addition to slow PC sales, Apple's iPad has increasing eaten into both consumer and enterprise PC demand, with Apple selling more than 7.3 million in the winter quarter and over 14 million in 2010. This year, Apple is expected to sell as many as 40 million of the devices, largely at the expense of Windows PCs.

Apple's iPad sales are already distorting the component markets for RAM and hard drives, and clearly slowing sales of conventional PCs, even as IDC and Gartner scramble to hide iPads behind the newly invented "media tablet" market to avoid direct comparisons to other tablet products and to PCs.

If iPads were counted as PCs, Apple would be the number one PC maker in the US with 24 percent of the market. Microsoft hasn't really faced a PC market that wasn't completely monopolized by Windows since the days before Windows, when it was earning less than Apple, a position it now appears to be in again.

post #2 of 46
When did Apple beat MS’ revenue in a quarter or are they besting both MS’ revenue and profit within the same quarter?

How much revenue is the Kinect expected to attract? They sold a lot of those things over the Holidays.
Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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post #3 of 46
Apple taking over Microsoft's spot... cool. Kids can sleep safely in their beds.
post #4 of 46
Yet, Daniel - when Microsoft was the one making all the money; it wasn't about the money.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #5 of 46
Quote:
Originally Posted by DrDoppio View Post

Apple taking over Microsoft's spot... cool. Kids can sleep safely in their beds.

Kids have been sleeping safely since May 26, 2010: http://www.nytimes.com/2010/05/27/te...y/27apple.html
post #6 of 46
Quote:
Originally Posted by solipsism View Post

When did Apple beat MS revenue in a quarter or are they besting both MS revenue and profit within the same quarter?

How much revenue is the Kinect expected to attract? They sold a lot of those things over the Holidays.

http://techcrunch.com/2010/10/28/app...osoft-revenue/

Last quarter. It has been a truly amazing ride to watch Apple over the last 12 years.
post #7 of 46
Quote:
Originally Posted by anantksundaram View Post

Kids have been sleeping safely since May 26, 2010: http://www.nytimes.com/2010/05/27/te...y/27apple.html

Indeed.
post #8 of 46
We created a monster. Apple may stumble at some point. Giants usually do.

It is hard to predict what is next for Apple. Everyone hopes the AppleTV grows legs but I'm not seeing it so far. Netflix is that thing that is probably driving its sales but an App store for the AppleTV is what will explode its unit volume hence getting the rest of the studios onboard.

Beyond the AppleTV is what? Media players, smartphones, tablets, and TV media centers. Maybe an in-car entertainment system. That would mean iOS embedded in appliances.
post #9 of 46
Quote:
Originally Posted by MacTel View Post

We created a monster. Apple may stumble at some point. Giants usually do.

It is hard to predict what is next for Apple. Everyone hopes the AppleTV grows legs but I'm not seeing it so far. Netflix is that thing that is probably driving its sales but an App store for the AppleTV is what will explode its unit volume hence getting the rest of the studios onboard.

Beyond the AppleTV is what? Media players, smartphones, tablets, and TV media centers. Maybe an in-car entertainment system. That would mean iOS embedded in appliances.

Even if Apple doesn't make inroads into one more market with a new product line, they could coast for the next 10 years just with what they have put together so far. Macs continue to outperform. Smartphones are exploding. The iPad owns a brand new device category. Hard to see them stumbling any time soon.
post #10 of 46
If the report pans out then SB may soon have to eat yet another of his bold statements made when Apple past the Market Cap hurdle . I realize net profit is not the same as income but I suspect Apple will get there soon even with MS able to make large margins on licenses.


By MIGUEL HELFT and ASHLEE VANCE
Published: May 26, 2010 in the New York Times

Microsofts chief executive, Steven A. Ballmer, shrugged off the shift Thursday morning. "No technology company on the planet is more profitable than we are," he said in New Delhi, where he had come to tout Microsofts cloud computing plans.
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post #11 of 46
Another great article by DED. I only recently figured out that all my favorite articles were written by the same guy. I'm your newest fan.

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Please update the AppleInsider app to function in landscape mode.

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post #12 of 46
Quote:
Originally Posted by shadash View Post

http://techcrunch.com/2010/10/28/app...osoft-revenue/

Last quarter. It has been a truly amazing ride to watch Apple over the last 12 years.

Thanks. Now that youve posted it I remember. (I woke up today with the flu. It appears to be frying parts of my memory. Cameronj was right last night, I am on edge, I just didnt know it yet. :)

Its pretty amazing they have gone from besting their market cap, their revenue and, most likely, their profits all within the 2010 calendar year. A couple years ago I thought it would take many quarters after they topped MS revenue to beat their profit simply because of the differences in HW and SW.
Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"
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post #13 of 46
Just goes to prove that Apple is at the top of its game as oppossed to MSFT which has fallen behind.
post #14 of 46
Quote:
Originally Posted by jd_in_sb View Post

Another great article by DED. I only recently figured out that all my favorite articles were written by the same guy. I'm your newest fan.

Sheesh!
post #15 of 46
All this with iPod, iPhone, iPad, Mac, Macbook, App Stores, Itunes, Software, ATV and add on accessories. nice one!
post #16 of 46
Microsoft, I remember them. Software company right?
post #17 of 46
I've always maintained that Apple unseating Microsoft at the top of the tech slag heap is going to be a long had slog where they will have to fight for every inch of territory. I was likening it to Toyota's 30-year generational struggle to overtake GM. Also, when Apple finally dislodges MS, I said it will not be because Macs finally outsell Windows PCs but because Apple will come up with a new generation of products that will basically supersede Windows AND Macs as the most ubiquitous computing device: Microsoft will still keep on selling a lot of Windows licenses, but Windows PCs will become the horse drawn carriage to Apple's newfangled automobiles.

Well that day just might be upon us, 20 years sooner than I expected. But that also means Apple could lose its primacy just as quickly as it grabbed it if they slip up enough and let someone else flit past them. It's got to be someone or some company that can out-Apple Apple though and I don't see anything out there that has the hardware, software, product dev and marketing smarts that Apple has.

Oh and by the way, Jobs said the problem with AppleTV and similar devices is the go-to-market strategy for which the cable companies are the big dumb oaf sitting right smack in the middle of the road to progress. We'll know that Jobs has stopped treating AppleTV (and our living rooms) as a hobby when he takes Apple's cash mountain and uses it to kick that big dumb oaf of the street by buying up Comcast. And we will all be cheering because, seriously, is there anyone here who doesn't hate his cable provider?
post #18 of 46
The original article makes this boneheaded statement:

Quote:
It could be a painful moment for Microsoft, which effectively saved Apple from extinction with a $150 million investment in 1997.

Ah, no. Fact checking, anyone?
Please don't be insane.
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Please don't be insane.
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post #19 of 46
Quote:
Originally Posted by Dr Millmoss View Post

The original article makes this boneheaded statement:



Ah, no. Fact checking, anyone?

MS payed 150 mil for all the copycat work it did.

Which of us is the fisherman and which the trout?

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Which of us is the fisherman and which the trout?

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post #20 of 46
Quote:
Originally Posted by Povilas View Post

MS payed 150 mil for all the copycat work it did.

More or less. The irritating part of seeing this old falsehood repeated so far removed from the events and the facts is that it's seemingly meant to perpetuate the myth that, deep down, Apple's success really belongs to Microsoft.
Please don't be insane.
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Please don't be insane.
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post #21 of 46
Quote:
Originally Posted by MacTel View Post

We created a monster.

Which "we" are you referring to?

Quote:
Apple may stumble at some point.

We may get hit by an asteroid at some point

Quote:
It is hard to predict what is next for Apple. Everyone hopes the AppleTV grows legs but I'm not seeing it so far. Netflix is that thing that is probably driving its sales but an App store for the AppleTV is what will explode its unit volume hence getting the rest of the studios onboard.

Apple has quite a bit of content via Disney - and they are finally starting to engage the the independents via iTunes Connect. The point is we didn't know what the details were before the iPhone or iPad, and they did just fine. Apple no doubt has a long term strategy for the Apple TV. The difference between Apple and other companies is Apple marches to their own drum, and they only make major moves when they feel it's appropriate.

Quote:
Beyond the AppleTV is what? Media players, smartphones, tablets, and TV media centers. Maybe an in-car entertainment system. That would mean iOS embedded in appliances.

I think people are vastly underestimating the iPad as a replacement for the traditional PC. What I see as next is an array of iOS devices that do not require a connection to iTunes and thus a traditional desktop PC. Apple has just started tapping a huge market out there for real personal computing.
post #22 of 46
After the success of Windows 95 the general perception was that MS "won" and Apple "lost" the OS battle. Not anymore. Apple has a shot at owning the majority of the mainstream computer market if the iPad keeps growing like it does - software and hardware - the whole darn thing. And these comments are comng from a Windows guy.

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post #23 of 46
Wow, no mention of Zune? I mean, if we are going to enumerate product categories that Microsoft has totally failed to beat Apple in...

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #24 of 46
Quote:
Originally Posted by tundraboy View Post

IWe'll know that Jobs has stopped treating AppleTV (and our living rooms) as a hobby when he takes Apple's cash mountain and uses it to kick that big dumb oaf of the street by buying up Comcast. And we will all be cheering because, seriously, is there anyone here who doesn't hate his cable provider?

It's not going to happen, this is frankly a parochial issue to the US, Apple's acquisitions have been of companies or technologies which have benefited the global sale of Apple products.

Apple won't acquire Comcast for media either, it already has access to plenty of media thanks to iTunes store.
post #25 of 46
The article is based on forecasts. There's a good chance we'll have to wait another 3 months for Apple to go ahead. \
post #26 of 46
I wish Apple would release the iWork apps for Windows and sell them for $3.99 a piece or something cheap like that. As long as it reads and writes MS Word file formats, most people would rather buy that then pay for another MS Office upgrade. Apple would make some more money and more importantly, MS would lose most all their Office revenue. That would be a huge hit for MS.

Apple also needs to drop the price of their server software to like nothing. While Apple would take a tiny little hit, MS would take another huge financial hit and lose a lot of their revenue. At some point the financial reports would look so bad, MS would get slaughtered in the press. People would stop buying MS Windows PCs just because they think MS is going down. Software companies would port all their software to Apple afraid they would lose this growing market.

Apple could also position their iOS/iPod touch/iPad as the next operating system for integrated business solutions such as point of sale machines and appliances. These PCs have influenced the sale numbers for years. MS would lose this income stream.

MS would have very little income and they still have a huge overhead. They would have to lay off workers left and right. That would lead to more bad press. MS can go down way faster than people realize. Apple has MS by the nuts. All they have to do is squeeze.
post #27 of 46
Quote:
Originally Posted by MacTel View Post

Everyone hopes the AppleTV grows legs but I'm not seeing it so far. Netflix is that thing that is probably driving its sales but an App store for the AppleTV is what will explode its unit volume hence getting the rest of the studios onboard.

What about finally setting up movie rentals in other countries than the US? Man, I want to believe in the Apple TV. Heck, I want to rent movies online instantly. I want an Apple TV, but Apple (and the movie studios, of course) prevent me from seeing the need to actually get one.

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post #28 of 46
Microsoft upper management are looking in every couch and drawer for lose change to make up the difference. Apple better try again next quarter.
post #29 of 46
Quote:
Originally Posted by visionary View Post

most people would rather buy that then pay for another MS Office upgrade.

Do you think people are crazy to buy the Apple suite and then pay for MS Office upgrade anyway?
post #30 of 46
I'm an Apple advocate like the next guy here, but I have no problems at all with buying and using Microsoft Office 2011. I even like the suite a lot. I've never bothered using iWork; it never appealed to me. I also have had no trouble buying a legal Windows license for Boot Camp. Hell, Microsoft and Apple are not really rivals anymore. They haven't been for a long time, if you ask me. You can use products from both companies and hate neither, you know?!

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post #31 of 46
Quote:
Originally Posted by Bengt77 View Post

I'm an Apple advocate like the next guy here, but I have no problems at all with buying and using Microsoft Office 2011. I even like the suite a lot. I've never bothered using iWork; it never appealed to me. I also have had no trouble buying a legal Windows license for Boot Camp. Hell, Microsoft and Apple are not really rivals anymore. They haven't been for a long time, if you ask me. You can use products from both companies and hate neither, you know?!

Amen, brother. +1
post #32 of 46
Quote:
Originally Posted by Dr Millmoss View Post

The original article makes this boneheaded statement:



Ah, no. Fact checking, anyone?

Yes, that did raise my eyebrow.
post #33 of 46
Quote:
Originally Posted by Bengt77 View Post

What about finally setting up movie rentals in other countries than the US? Man, I want to believe in the Apple TV. Heck, I want to rent movies online instantly. I want an Apple TV, but Apple (and the movie studios, of course) prevent me from seeing the need to actually get one.

I've got an Apple TV here in Hong Kong and I can rent movies and TV shows.

All you need is a US iTunes account, which you can get by buying a US iTunes gift card on eBay, anywhere in the world.

Apple doesn't check IP location. Now, if only Netflix were as easy!
post #34 of 46
Apple seemingly lost the PC war to windows, but now it has moved the battle to the mobile and tablet market. And it is no battle.

The one with the most mindshare wins. Money helps, too.

Go apple.
post #35 of 46
Quote:
Originally Posted by Eriamjh View Post

Apple seemingly lost the PC war to windows, but now it has moved the battle to the mobile and tablet market. And it is no battle.

The one with the most mindshare wins. Money helps, too.

Go apple.

No, the PC war is far from over. As Apple has shown, and will show even more as the snowball rolls.
post #36 of 46
That's what happens when you ignore "rounding errors".
A is A
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A is A
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post #37 of 46
Quote:
Originally Posted by jd_in_sb View Post

Another great article by DED. I only recently figured out that all my favorite articles were written by the same guy. I'm your newest fan.

You're a fan because he's right. His
articles may seem "unbalanced", however, mostly because it's a wildly unbalanced situation. Apple has turned the industry on its head. But to extol this point is forbidden, because every laudatory comment about Apple (which even if made offhand and without qualification is probably true nine times out of ten) must be followed by a laudatory comment about the competition, or tech in general, and how lucky we are that the competition is "forcing" Apple to improve, and how many wonderful choices we have from so many talented vendors.

All of which is total busllhit.

Fairness and equanimity for their own sake and purely to appear objective in order to win approval is disingenuous garbage.

DED isn't afraid unmask a situation for what it really is and give credit to those who deserve it, no matter how one-sided it is. Sometimes reality and fortune *are* very one-sided.

Cheers.
post #38 of 46
Quote:
Originally Posted by Doctor David View Post

Microsoft, I remember them. Software company right?

They used to be I seem to recall, now I think they collect rent from stuff they sold a while back.
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From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
Google Motto "You're not the customer. You're the product."
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post #39 of 46
Quote:
Originally Posted by solipsism View Post

Thanks. Now that youve posted it I remember. (I woke up today with the flu. It appears to be frying parts of my memory. Cameronj was right last night, I am on edge, I just didnt know it yet. :)

Its pretty amazing they have gone from besting their market cap, their revenue and, most likely, their profits all within the 2010 calendar year. A couple years ago I thought it would take many quarters after they topped MS revenue to beat their profit simply because of the differences in HW and SW.

Get well soon. I recall our doc in England (back in the day when they came to your house) recommended sweet hot water and Scotch for flu, (you mix sugar and water and throw it down the drain and drink the Scotch).
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
Google Motto "You're not the customer. You're the product."
Reply
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
Google Motto "You're not the customer. You're the product."
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post #40 of 46
Quote:
Originally Posted by Bengt77 View Post

What about finally setting up movie rentals in other countries than the US? Man, I want to believe in the Apple TV. Heck, I want to rent movies online instantly. I want an Apple TV, but Apple (and the movie studios, of course) prevent me from seeing the need to actually get one.

Unfortunately, this probably has more to do with the studios than Apple.

Do you get Netflix?
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