Yesterday's earnings reports from Microsoft and Apple showed a contrast in corporate strategies: Apple's aimed at consumers, Microsoft's targeted at businesses. Those reports and the press's reaction to them shows why right now Apple matters to the world, and Microsoft doesn't.
Apple reported massive profits for the quarter, $7.7 billion, just beating out analysts' estimates of $7.5 billion. Revenue was $37.4 billion, driven by iPhone and Mac sales, although iPad sales dropped to 13.3 million for the quarter, down 9% from a year ago. As usual, its revenue was driven by sales to consumers.
Microsoft reported profits of $4.6 billion for the quarter, down from $4.9 billion a year ago. It had $23.4 billion in revenue, well over the $19.9 billion of a year ago. It barely beat analysts' estimates of $23 billion in sales. Unlike Apple, Microsoft sales were led by sales to business customers, including commercial cloud revenue, sales of Office to businesses, Windows volume licensing to businesses, and server and system management products.
Because Apple targets consumers and Microsoft targets the enterprise, Apple's earning report got much more play in the press than did Microsoft. Everyone, after all, knows what iPads and iPhones are. Not so many people have heard of SQL Server and System Center, Azure, and Dynamics CRM Online.
Because of that, the press has decided that Apple means more to people than does Microsoft. A perfect example of that is the placement of articles about the Apple and Microsoft earnings reports in the New York Times. Turn to the front page of the Times business section this morning, and you'll find the article about Apple's earnings at the top of the page on the right column -- important real estate. To find the article about Microsoft earnings, you'll have to leaf through to page 3 and look below the fold. Not so important real estate.
You may think this doesn't matter, but it does. As long as Apple gets more visible coverage than Microsoft, consumers will be more inclined to use its products. And in a bring-your-own-device world, that interest leaks into businesses as well.
The only way that might change is if Microsoft releases a hit consumer product. But none seem to be on the horizon. For the foreseeable future, Apple will continue to win the PR war.