Friday, April 29, 2011

Microsoft $5.2 billion VS Apple's $5.99 billion

The Wall Street Journal documents Microsoft 3Q Net Jumps 31%, But Windows Decline Dims Outlook - WSJ.com

Short answer, Microsoft did better than it has been but not enough to beat out it's rival Apple. Which is funny given how Microsoft bailed out Apple back 1997. Some theorize that without Gates, Microsoft is just moving on to a the slow death. Apple suffered without Steve Jobs for several years and look what happened when he returned!

Ars commented on the same story yesterday and the comments section went the way of the troll. But there were some good points made. One, Apple is a hardware company not a software company like Microsoft. Yes, they do have some software but they have dominated with their hardware and they have capitalized on the App Store which is a constant stream of revenue for Apple, to the tune of almost $2 billion. That's a huge sum for something that requires relatively little effort on Apples part. Microsoft has nothing to compare/compete with the App Store.

Microsoft is trying it's hand at the mobile game but lets be real. The hardware part is nothing compared to the application end and Apple gets a nice slice from every pie that goes through their store.

Apple gets 30% of every dollar that goes through the app store and that is almost free money. Add in the price of the phone, and what Apple gets for kick backs from the phone providers and you make lots of money. Microsoft doesn't compete. Apple has mobile providers nearly frothing at the mouth to get access, where as Microsoft is "meh, I guess we can carrier your OS."

My personal opinion is the Microsoft VS Apple is a bad comparison. They do have some overlap but they both compete in vastly different areas. I'd be more interested to see analysis on the Android impact as Android of today is the PC of yesteryear and Apple lost that battle in the 80's and 90's.

Android is not making more money than Apple but it has captured market share. Microsoft is not significant in the phone market, but Google is and Android VS iPhone is a far more realistic comparison.



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