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Microsoft's record results just $300 million ahead of Apple

updated 04:55 pm EDT, Thu July 22, 2010

Microsoft makes 16m in Q2 but barely past Apple

Microsoft this evening reported a best-ever spring quarter revenue that was undermined by its proximity to Apple's. The Windows developer made $16.04 billion in revenue but was just $300 million ahead of Apple's $15.7 billion during the same period. The gap in net profit was wider but still relatively close, at $4.52 billion for Microsoft versus $3.51 billion for the Mac maker.

The 22 percent year-over-year jump for Microsoft was credited both to the continued success of Windows 7, which was finally reaching large business, as well as the launch in May of Office 2010. The company said it had sold 175 million copies of Windows 7 both pre-installed and at retail.

Also touted were Windows Server, the redesigned Xbox 360 and Bing, which has kept gaining share for over a year.

The results nonetheless masked certain ongoing problems at the Redmond-based company. Its online services group, including Bing, fell slightly below expectations and made just $565 million. Entertainment and devices, which includes the Windows Mobile, Xbox and Zune groups, made much more at $1.6 billion but had its results tarnished by the complete failure of the Kin, which in its brief life managed fewer than 10,000 sales despite a large ad campaign.

While Windows and Office are still poised to be revenue drivers, Microsoft placed most of its hopes for the fall on the launch of the Kinect for the Xbox 360 and Windows Phone 7, which it hopes will reverse years of decline in Windows Mobile.

The expected growth is essential for Microsoft, but the ongoing summer quarter could represent the first in well over a decade in which Apple's is higher than Microsoft's. Apple's emphasis on hardware sales over software has helped it grow much faster in recent years, and the launch of the iPad along with massing iPhone sales pushed revenue growth almost three times faster year-over-year to 61 percent, enough to all but to negate Microsoft's existing size advantage.




by MacNN Staff

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Comments

  1. Bobfozz

    Joined: Dec 1969

    +5

    Go Apple

    Stay clean and ethical for your fans... you won't have the problems of Michael Dell.

  1. iphonerulez

    Joined: Dec 1969

    +5

    Microsoft might be an worn out old truck

    but the freight it's hauling is still more valuable than Apple's quick-handling sports car. Microsoft is nowhere's close to death. Apple needs to buy up some company that could put it on par with Microsoft. Of course, I don't have a clue what that would be. Maybe some established company that has some necessary business software or hardware.

    All Microsoft has to do is keep recycling that old software over and over to make big bucks, but Apple has to keep pulling miracles out of it's pocket at least once a year or the analysts will toss Apple into the garbage heap.

  1. bauhaus

    Joined: Dec 1969

    +4

    Gross vs Net (percents)

    Relatively close is incorrect. The gross earnings could be considered relatively close, but the net are not.

    Microsoft is pretty far ahead there (and it makes sense since Apple is a hardware company and the costs associated with production for a hardware company are more than a mostly-software company.) $1bil diff is not small when you see that MS's net additional earnings are 28.77% of the net earnings of Apple.

  1. testudo

    Joined: Dec 1969

    0

    Re: Gross vs. net

    (and it makes sense since Apple is a hardware company and the costs associated with production for a hardware company are more than a mostly-software company.)

    On the other hand, a hardware company generally makes a lot more money than a software company because of the higher prices for the hardware. This is one of the arguments why Apple won't just let OS X work on any computer. They wouldn't make up the difference in sales.

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