It’s that time of the year again when the technology titans release their quarterly earnings report. These reports provide a great insight as to how well a company is doing and typically break down the successes and failures or various product lines. This week both Microsoft and Apple divulged their quarterly numbers during their investor calls. In the epic battle between Microsoft and Apple, which company came out on top?
Microsoft, as you might imagine did less than stellar in their report. During the quarter, Microsoft reported a net income of $5.86 billion, or in terms of shares 71 cents. The same quarter last year Microsoft had reported earnings of $6.56 billion. Microsoft’s revenue did increase 8% to $26.47 billion. What caused a major drop in net income? Based on the numbers, sales of Windows had declined. As someone who has been using Windows forever, this is no shocker to me. Windows 8 has been a disaster from before it went live. Having played with early beta versions of the software I could only ask myself if Microsoft wanted to deliberately lose customers based on the user interface and radical changes.
Some areas of growth for Microsoft include sales of the Microsoft Surface and the adoption of Office 365. The Microsoft Surface is Microsoft’s answer to the tablet with some impressive hardware specifications. For people who are looking to run a PC in the form of a tablet, the Microsoft Surface is hands down the best tablet on the market. Running high end applications like full blown Photoshop is done with ease on the Microsoft Surface. It is compact and light weight and is able to have a keyboard easily hookup and be used like a touch screen PC for any word processing or development applications. Microsoft’s Office 365 is a cloud based platform that offers customers online access to the entire Microsoft Office Suite. Office 365 is a subscription based model that brings in recurring money monthly or annually for Microsoft. Similar to how Microsoft makes money from corporations with their Enterprise Agreements, users who subscribe to Office 365 will always have access to the latest version of Microsoft Office. Taking advantage of the cloud and the fact that most people around the world have decent access to the Internet, this new platform for Microsoft Office may be the way everyone eventually accesses the Office Suite one day. The standard desktop licensing of the application may one day be no more.
In terms of the future for Microsoft, I have high hopes that Windows 10 will help reposition Microsoft as a company. By taking the best features of Windows 8, and bringing back some of the user interface of previous Windows operating systems I think Microsoft will once again find success in the operating system world. Another piece of technology I am really looking forward to seeing more of is the Microsoft Hololense. The Hololense was debuted recently and looks like an amazing piece of wearable technology. If it can live up to the hype, the Hololense will bring us that much closer to devices once only dreamed of in television and movies. It may make televisions obsolete one day based on the promotional video Microsoft released. All and all, I think Microsoft has some nice tricks up its sleeves for the future and look forward to what they deliver.
In terms of the Apple earnings report I was actually a bit surprised. Apple announced via a press release that they had a record revenue of $74.6 billion, and a net profit of $18 billion! Last year during the same quarter Apple had a revenue of $57.6 billion, and a profit of $13.1 billion. These numbers are extremely impressive for Apple over the course of a single year. The major contributors to Apple’s success in this past year were due to the record number of Mac and iPhone sales, as well as increased performance of the Apple App Store. The earnings per share growth jumped 48% over last year. I was really surprised that Apple had done so well in the past quarter. With the smartphone market being such a battle ground between Apple and Samsung I didn’t predict that the iPhone 6 was going to produce a record number of sales for Apple. The tablet market is also no longer dominated by the iPad which led me to believe Apple would not meet its earning expectations this time around.
Apple does have a loyal set of customers though. I have been an iPhone owner since the beginning and have been loyal to the iPhone. Each time I am out of contract I upgrade to the latest iPhone without even looking at what else is on the market. While Samsung and the Galaxy phone series have always been appealing and probably the iPhone’s stiffest competition, I have never even picked one up. With the iPhone 6, and iPhone 6 Plus, Apple finally gave the masses the option of a bigger phone, and even a phablet. Giving the masses what they want and charging the “Apple tax” definitely helped Apple reach their huge successes in the last quarter.
When it comes to the future of Apple, the world can look forward to the Apple Watch sometime in April based on what Apple CEO Tim Cook mentioned. Apple’s first wearable device is coming into a market that already has some competition with the Pebble Smart Watch, Samsung Gear, Motorola Moto360, and the LG G smartwatch. As a fan of the iPhone I am looking forward to seeing what Apple can come out with in terms of a smartwatch. From what I have read and seen, the Apple Watch is going to be a beautiful fashion accessory that is also very capable of running high quality applications that can help people. Using the Apple Watch with fitness apps will also allow Apple to compete with items like the FitBit and other health wearable bands. With the Apple Watch able to compete with two different markets, it should also increase sales. The biggest downfall with the Apple Watch in comparison to what is already on the market is no surprise, the price starts at $349.00 for a base model Apple Watch. Personally, I do not think this will hurt Apple very much as most Apple customers are used to paying a premium for any Apple product. For those that are a bit strapped for cash though, you might want to checkout http://www.freeapplewatch.com. The people over their are holding a giveaway by which anyone who enters could walk away with a new Apple Watch. They are also giving away iTunes gift cards, and a Pebble SmartWatch. Entering into the Apple Watch giveaway is completely free and earning points is as simple as sharing your contest link on social sites like Facebook and Twitter. If you want to learn more about the Apple Watch giveaway be sure to check them out today.