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Microsoft's quarterly profit drops below Apple's for the first time in 20 years
- orijing 15y agoMisleading. Microsoft's quarterly profit grew pretty quickly (above 30%). It's just that Apple's profit grew faster, causing it to take the lead in the race.
- fredoliveira 15y agoI don't see what's misleading here. Doesn't your sentence basically mean the same thing the title does? As you said, microsoft's profits grew slower, and they had lower profits than apple did, which means the story title is far from misleading.
- benologist 15y agoMS didn't drop below Apple, Apple grew above MS. It's a pretty important distinction - drop means they declined, Apple is now making more money than Microsoft, and Microsoft is making more money than they used to too.
- protomyth 15y agoWhen describing standing in sports you don't say "X won less than Y so Y is ahead", you say "X dropped below Y in the standings". Most financial reporting is based on sports speech.
- kenjackson 15y agoStandings are a relative measure. Profits are not. You can say MS dropped below Apple in the rankings of profits. Likewise, one would NOT say in sports that X dropped below Y in wins. You'd say that Y passed X in wins.
- deleted 15y ago[deleted]
- jammur 15y agoI don't think it's misleading. Since it says that MS profit "drops below Apple's", it's making reference to a relative difference, in which case it did drop.
- watty 15y agoIt can be understood in multiple ways, maybe not intentionally misleading but it could be written better. "My height grew above Yao Ming's last year". Did I surpass his height last year or grow more during that period of time?
- jammur 15y agoIn that case, you are now taller than Yao Ming. The subject of the sentence is your height, and you said it grew 'above'. Therefore the only valid interpretation is that your height is now above Yao Ming's. For it to be interpreted the other way, you would have had to say "My height grew _faster_ than Yao Ming's last year", or "My height _growth_ was above Yao Ming's last year". My point is that people can interpret things any way they want, but that doesn't mean their interpretation is valid.
- watty 15y agoHah, we're getting off topic. You're right, phrasing it that way leads to multiple interpretations whether correct incorrect. When I read the title originally, I was thinking "total profit" instead of relative. Whether intentional or not, I think the title could have been worded better.
- jscore 15y agoNot misleading at all. You just misunderstood. A drop is a drop even when it's relative.
- orijing 15y agoGuys, I didn't mean to start such a discussion over the wording. I said it was misleading, not "cannot be interpreted correctly." In particular, by saying that X's profit dropped below Y's for the first time (without context of X and Y) suggests TO ME that X's profit dropped when that was not the case. By "misleading," I meant that had I not known profit figures already, I would have assumed the title meant that Microsoft's profit had fallen. It means that the understanding it leads you to believe initially is incorrect, hence misleading.
- glhaynes 15y agoI downvoted your original post because I read "misleading" as implying that it was intentionally, wilfully misleading - i.e. lying. But you're correct: the wording misled you (and understandably so) to an incorrect conclusion. Apologies.
- orijing 15y agoNo worries. Perhaps my use of "misleading" was itself misleading!
- bstar 15y agoI guess I was most amazed that in 1991 Apple's profits were greater than Microsoft's. I was playing Ultima 6 and King's Quest V back then... I didn't know anything existed but the IBM PC.
- deleted 15y ago[deleted]
- protomyth 15y agoOffice came out in 1990 and took a while to take over. MS-DOS wasn't as profitable as Windows would be.
- CamperBob 15y agoTheir margin was certainly higher. Macs were brutally expensive around that time. It was no trick at all to drop $10,000 on a high-end Mac system.
- runjake 15y agoFor me, it's more interesting that Apple did this without a lot of the shady business & licensing practices that Microsoft engages in. Edit: Before downvoting me, take a look at my comment history. I'm not your typical Apple fan/Microsoft basher.
- orijing 15y agoDo you think Apple's walled approach to iOS apps and content on iOS platforms is more honorable than Microsoft's open development initiative? (i.e. letting anyone write Windows applications). To me, their decision to prevent iOS apps from getting content outside of its walled garden (and bypass the 30% fee) is much more anti-competitive than whatever Microsoft did. I don't know if anyone downvoted you (I didn't). I just wanted to hear your opinion. I'd like to hear what you mean by 'shady', and what in particular about Microsoft makes it shadier.
- benologist 15y agoThey both make dick moves every day and get soundly rewarded for doing so.
- bonch 15y agoWhich implies that most consumers don't consider them to be dick moves.
- Anechoic 15y agoOr that most consumers don't have a choice in the matter (especially in regards to MS - I don't have a laptop running Windows & Office because I like Windows & Office).
- glhaynes 15y agoThat's the question, isn't it? If the user feels like they don't have a choice (and especially if it's because any potential choice has been intentionally squelched by the reigning monopolist), then it starts to seem dickish. There are plenty of alternative mobile platforms and thus it's rare to see people complain that they're forced into using an iPhone.
- pessimist 15y agoTwo things - Windows license down 4% year-over-year(!) while macs rose 28%, and $728 million loss this quarter alone competing with Google. Thats a run-rate of $3b loss just to compete with Google - at some point one has to think this assault - plus competition from Apple and facebook - will finally start hurting Google a lot.
- orijing 15y agoWhile it is significant that Microsoft's falling behind Apple, I'm not particularly surprised that OS sales are slightly lower than it was last year at Microsoft. Last year was the start of the launch of Windows 7.
- eddieplan9 15y agoMSFT is down 4.4% now: http://www.marketwatch.com/story/microsoft-offers-more-muted-view-of-pcs-2011-04-29?link=MW_latest_news http://www.marketwatch.com/story/microsoft-offers-more-muted...
- smackfu 15y agoStocks move for odd reasons. Not based on the news directly, but based on the news relative to what the market thought the news would be.
- r00fus 15y agoProbably has to do with concurrent reasons why Apple is overtaking them in profitability, notably, the iPad is absorbing the netbook market (MS reported netbook sales down 40%).
- cooldeal 15y agoMicrosoft spends a significant amount on basic research, like Bell labs used to and Microsoft research publishes a lot of publications. 15% of the research budget goes to universities for research, that could keep the profits lower than Apple.
- orijing 15y agoIn fact, Microsoft spends around $2-2.5b on R&D per quarter [1] while Apple spends $500-600m [2]. That certainly more than makes up for the difference. [1] http://finance.yahoo.com/q/is?s=MSFT http://finance.yahoo.com/q/is?s=MSFT [2] http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii http://www.google.com/finance?q=NASDAQ:AAPL&fstype=ii
- wooster 15y agoI was on a team once at Apple with ~15 people on it. At one point, we found out the equivalent group at Microsoft had ~500 people. Most people I've talked to who worked elsewhere are shocked at how small the teams at Apple are.
- singular 15y agoDid you find the small team size a pleasant experience? Is it a case of many small teams adding up to a lot of people, or genuinely few small teams?
- jballanc 15y agoMy experience was that it was genuinely small teams...and it was fun! It's one of the ways that Apple maintains a startup-like atmosphere despite being such a large company. Oh, and Apple remains a very flat company. I was 5 degrees removed from Steve Jobs, and I don't know anyone that was more than 8...including retail staff!
- mkramlich 15y ago> Oh, and Apple remains a very flat company. I was 5 degrees removed from Steve Jobs, and I don't know anyone that was more than 8...including retail staff! This sounds funny from my POV because I work mostly with startups now so I'm usually 0-1 levels away from the CEO. In the last 2 weeks alone I've ended up in F2F conversations with folks who I originally thought were some bizdev guy, perhaps a senior technical architecht, but no, turns out, that was the CEO. (... ", bitch." <--- per The Social Network) I was in a conversation the other day with a guy who was the CEO of a potential competitor, but at the time I didn't know he was the CEO, or that they were a potential competitor, and likewise in reverse. Funny stuff. So yeah, this whole "flat company" with a mere 5-8 levels of hierarchy, makes me giggle. Back to my Terminal session, which this CEO considers his office. :) (not criticising, just pointing out the humor of relative POV's)
- hvass 15y agoCan someone please explain why Apple spends relatively so much less than Microsoft on R&D? I would've thought it's the opposite.
- recoiledsnake 15y agoMicrosoft does a lot of basic research, not just applied research.
- brg 15y agoI would look at it from the perspective of Microsoft spending so much more than everyone else. Research encompasses a lot of things at MS, from pure research labs in Redmond, Boston, Cambridge to online services and live labs. Microsoft runs perhaps the largest CS research organization in existence, when basic research is considered alongside product research such as Bing and Photosynth. MSR grew to be so by the promotion of Nathan Myhrvold, and the buy-in he was able to get from Gates and Ballmer. It maintains itself by being able to collect a lot of talent, and keeping them interested. But like Lucent, it probably only survives as long as the company is growing.
- kenjackson 15y agoIn many ways Bill Gates seems to view MSResearch and the Gates Foundation as his legacy, more than Microsoft proper. Whereas for Steve, I think Apple is his legacy.
- romey 15y agoWhat I think is most interesting about this is that 1. People continue to compare Microsoft and Apple as if they were directly competing, in spite of the fact the Apple is [primarily] a hardware company and MS is [primarily a software co. and 2. In spite of being primarily a hardware company, Apple is still able to be more profitable than Microsoft. They truly do release their hardware as if it were software, iterating and releasing a new version nearly every year. Even more surprising is that people actually buy this new hardware annually, as if it were a software upgrade
- raganwald 15y agoHardware is not software, but it's trending in that direction. The price of the raw components keeps falling, we are headed towards a future where a tablet is really a hardware dongle for an operating system or an advertising platform.
- johncoltrane 15y agoIts not only blog commenters, pundits or people. You wouldn't believe how much MSFT people are fixated on Apple despite having no direct competition between each other (except Zune Vs. iPod, but I would say it doesn't count). The fruit word and the fruit logo used to come up in almost every external powerpoint presentations/briefings five or four years ago, it was crazy. They are/were fascinated by Apple and lack any ability to even understand how they work and, of course, learn from them. For some reason, I find it hard to imagine a keynote in Cupertino with a pixelated Windows logo in every slide. But I might be wrong. I hear now they are fascinated by Google, now.
- bkhl 15y agoWhat we need to focus here is this...despite the decrease in PC sales, Microsoft managed to grow. They did not just grow a little, but they grew tremendously. 30%? that's a huge number for a company like Microsoft. Nonetheless, Apple has reached another huge milestone in their history.
- kevin_morrill 15y agoRight, I think the point is this says more good things about Apple and doesn't really say that MS faces impending doom. Both companies are quite impressive, just more so for Apple. To grow a megacap company in double digits is quite a feat.
- fauigerzigerk 15y agoTheir revenue grew 13% yoy and earnings include 5 cents one off tax benefit. Without that earnings still grew about 24% coming out of a recession. What caused Microsoft's share price to fall massively yesterday was that Windows revenues actually decreased, which is rather surprising.
- cocojumbo123 15y agoherp-derp. Title should had rather been: Apple's profit is higher than Microsoft's for the first time in 20 years.