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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