Anything Microsoft can do, Apple can do better?

The tech wars continue apace, with impressive Microsoft results out today. But it still doesn't have the edge over Apple.

by Emma Haslett
Last Updated: 20 Oct 2011

It’s a good day at Fort Microsoft: the software company has published end-of year results showing revenues hit $69.94 (£43.3bn) last year, while net income jumped by just under a quarter to $23.15bn, and sales rose by 8% to $17.37bn. Final quarter revenues were equally impressive, reaching a record high of $1.37bn, with profits of $5.87bn. So corks are undoubtedly a-popping chez Gates. Although Microsoft still can’t seem to get the edge over its rivals…

Sales were apparently largely driven by an upsurge in popularity for its Xbox 360 games console, and (at the other end of the seriousness scale), its Office software (ie. Word, PowerPoint, Excel, etc). Indeed, its business division was by far the most successful arm of Microsoft, with sales rising by 7% to $5.8bn. Its online services unit, which is in charge of its search engine, Bing, also saw sales jump by 16.5% to $662m – although its losses still increased to $728m as it struggled to compete with Google. Windows (as in the operating system) also saw a slight decline as people opted to buy tablet computers instead of PCs.

It’s unfortunate for Microsoft that Apple released quarterly figures only a couple of days ago, which showed that over the last four quarters, it’s made about $100bn in revenues, which yet again puts Microsoft's achievements into the shade. That’s partly because, other than the Xbox, Microsoft doesn’t really manufacture much in the way of expensive, high-margin hardware, instead concentrating on software. But Apple has also been canny about the markets it’s cornered – particularly when it comes to its app and iTunes stores.

Had Microsoft been swifter on the uptake, it could well have taken a bite out of that market (pun entirely intended). Although it's worth mentioning that Microsoft has plans to take some of Apple's market, not least with its soon-to-be-launched new operating system, code-named Windows 8, which will be compatible with tablets. And then there's its up-coming tie-up with Nokia, which will give it a stronger position in the mobile market.

So not even the mighty Apple is impervious to competition. Facebook may be all a-quiver after users staged the virtual equivalent of a revolt over the latest version of its iPhone app (MT can sympathise – we’ve abandoned using Facebook's app, opting for its more limited, but more reliable mobile site instead). But if rumours are true, Facebook is planning to bypass the app format altogether: tech blog TechCrunch has reported that it’s working on a special HTML 5-based version of its site. Which means users will be able to access the bells-and-whistles version of its site, including playing (and paying for) games, straight from their phones’ browers. That means less revenue for Apple – which is a worry, when it’s staked so much on apps being its future.

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