When Apple was chasing Microsoft last year in market capitalization, a lot of people were pointing out that the software maker would continue beating the Cupertino company in terms of profitability. Well, Microsoft just posted their quarterly earnings yesterday. Despite record first-quarter numbers, their profits were significantly below the nearly $6 billion in net quarterly profit Apple posted. More precise, Microsoft reported $5.23 billion profit versus $5.99 billion for Apple.

In terms of revenue, Microsoft reported $16.43 billion versus $24.67 billion for Apple. Apple’s annualized revenue makes them a $100 billion company while Microsoft is yet to join this club. The only area where Microsoft is ahead of Apple are profit margins. Considering net profit as a percentage of revenue, Microsoft’s 32 percent margin beats Apple’s 24 percent. Of course, Windows maker makes most of its revenue selling highly profitable software products that yield high margins.


This significant milestone comes as Apple surpassed Microsoft in market valuation nearly a year ago, in May of 2010.

A few months later, in the third quarter of 2010, Apple went on to surpass Microsoft revenue-wise and now it beats them in profits as well. Apple’s meteoric rise stems from their highly lucrative iPhone business.

Depending on who you ask, the average selling price of the iPhone is an estimated north of $600 per unit. Apple sold an astounding 18.65 million iPhones in the last quarter and the handset now accounts for half of their revenues.

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