First Apple surpassed rival Microsoft in market capitalization, now the Cupertino, Calif. company has beaten the business that Bill built in terms of flat-out revenue. The iPad maker recorded a record $20.34 billion this quarter, compared to Microsoft’s $16.20 billion.
Apple didn’t just beat the Redmond-based software giant, but stomped Microsoft’s best ever three-month period: $19 billion in revenue. The one area Microsoft still leads is profit margin. The company reported $5.41 billion compared to Apple’s $4.31 billion. Apple’s profit margin was below expectation this quarter as it dealt with keeping costs low for the iPad and the extra expense of a free bumper program in response to problems with the iPhone 4.
Microsoft’s biggest portion of profits reported were from sales of Office, which garnered $5.13 billion. (The company recently released Office 2011 for the Mac to mixed reviews.) Microsoft’s Windows division, usually an anchor, brought in $4.79 billion. Microsoft has yet to find the right product to challenge Apple’s iPod or iPhone, a possible reason for its Entertainment Devices Division reporting just $1.8 billion.
By contrast, Apple recently reported $8.8 billion in iPhone sales, $2.8 billion from the iPad, and $1.4 billion from the iPod. The Cupertino, Calif. company also raked in $1.2 billion from iTunes music products, $4.9 billion from Macs and $1 billion from software, peripherals and services.
Despite the long-running rivalry, the two companies have recently become partners to shape the computer industry. Apple’s iPad along with Microsoft’s push for higher priced PCs has put a dent in netbook demand, while Microsoft has expanded into providing software for the Mac, including Office for OS X and software syncing Windows Phones with iPhoto and iTunes.