Apple's Profit Is Now HIGHER Than Microsoft's

steve jobs

Photo: AP

Apple passed Microsoft in market cap last May. It passed Microsoft in revenue in the third quarter of 2010.And now it’s passed Microsoft in profit as well.

Apple’s profit for the quarter ended March 31 was $5.99 billion.

Microsoft’s profit was $5.23 billion. Not even close.

Half of Apple’s revenue came from the iPhone, a market where Microsoft isn’t competitive — and even if Windows Phone sells tens of millions of units after the Nokia deal, Microsoft will only earn $15 or $20 on each handset, compared with several hundreds of dollars per iPhone for Apple.

There is one financial metric where Microsoft is still ahead: margins.

Microsoft’s net profit as a percentage of revenue was 32%.

Apple’s was 24%. That’s unbelievable and spectacular for a hardware company, but software has much lower cost of goods — once you’ve recovered your R&D investment, every sale is pure profit — and Microsoft is still primarily a software company.

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