Oct 27
Apple’s Success - Microsoft’s Shame
When it comes to cheap MP3 players, Apple and Microsoft are both out of the question. When talking about cheap computers, Microsoft is clearly leading the way, since Windows-based computers are always cheaper than the Macs, but we should also keep in mind Microsoft is not manufacturing any computers by itself. Anyway, I am sure that driver certifications and others similar things bring a lot of money for the Redmond giant, but today we're going to talk about a more interesting part of the Apple vs Microsoft battle...
In most cases, when you hear about Apple vs Microsoft, you think about computers or media players, especially since the popular belief is that Apple is much smaller than Microsoft. No, it's not the truth, although Microsoft's big ones like to talk about the Cupertino-based company vs themselves like General Motors would compare itself to a small grocery. Unfortunately for them, things look quite different, as we're going to see next.
Before moving on, just a reminder - if you think the new Apple ads are not telling the truth,
- Microsoft claims Apple has less than 5% of the worldwide computer market, but...
- Apple now has more cash than Microsoft
- Apple earns half of Microsoft's profits, and 3/4 of its revenues!
- Apple also reported a cash position of $24.5 billion!
In the last quarter, Microsoft released revenues of $15.06 billion, net profits of $4.37 billion, and a reserve of cash, cash equivalents, and short-term investments that added up to $20.7 billion, while Apple reported $7.9 billion in revenues and $1.14 billion in net profit, but this leaves most of the iPhone business out of the equation, since that is hidden away in subscription accounting under GAAP rules. Once the iPhone numbers are added, the previous reported sums go up to $11.68 billion in revenue, and $2.44 billion in net profits.
At last, it should be noted that, when it comes to growth rates, the Apple vs Microsoft fight has a clear winner, since Apple's non-GAAP revenue increase of 75.1% year over year, while Microsoft only had a quarterly revenues growth of 9%.
I don't know what's going to happen in the long run, but if things continue to move in this direction, Microsoft may become a memory sooner than expected...
1 vote(s)
Loading ...
October 28th, 2008 at 2:48 pm
This is an unfair comparison b/c Microsoft also has revenue & profit not included due to software subscriptions businesses have purchased.
For example, MS has $15.3B of unearned revenue from the quarter that ended June 2008 (the qtr I’m using because it has a detailed breakdown)
http://www.microsoft.com/msft/earnings/FY08/earn_rel_q4_08.mspx
It should be noted that Apple has more cash b/c Microsoft has been using their stockpile (which was around 60B at one point) to buy shares and pay dividends - returning the money to shareholders. It isn’t as if they have had unprofitable quarters eating into their cash position.