As Microsoft prepares to report its fiscal Q4 and 2010 earnings Thursday, everyone's waiting to see if the software giant's quarterly revenue will fall short of Apple's. If it does, speculation will fly about a changing of the guard in IT, but it won't be rooted in reality.
Apple earlier this week reported another blowout quarter with revenue of $15.7 billion and $3.25 billion in profit. Apple is making most of its money right now in the mobile space, which is exactly where Microsoft is the weakest.
But while Apple pulling in more revenue than Microsoft this quarter will add fuel to the 'Microsoft Is Doomed' argument, this can't fairly be used as an indicator of each company's overall health. Both Apple and Microsoft partners agree that comparing a company that sells mainly to businesses with one that's consumer oriented isn't fair.
"Apple is a hardware company at their core, and so they are selling hardware and software," said Dave Sobel, CEO of Evolve Technologies, a Fairfax, Va.-based solution provider. "If you combined Microsoft's hardware and software sales by adding Dell, HP, IBM, and other OEMs, you'd have a more accurate comparison."
Apple resellers already believe that Apple's star is rising while Microsoft's is fading. But they're not going to start singing 'Ding, Dong, The Witch Is Dead' if Apple overtakes Microsoft in quarterly revenue.
"Everyone likes to attach symbolic meaning to this, and Apple does have the upper hand on Microsoft in terms of public perception. But there is definitely a lot of fluff out there in terms of conclusions being drawn from what are essentially just numbers," said Michael Oh, founder and CEO of Boston-based Apple reseller Tech Superpowers.
David Doyle, vice president of Vancouver-based Apple partner Simply Computing, says people are simply giving Apple products a closer look because they're tired of the status quo. "Apple is putting out a lot of forward thinking products and hitting a customer base that's looking for a different option," he said.
There's plenty of reason to believe that Apple's mobile success will continue. During its fiscal third quarter ended June 26, Apple sold 8.4 million iPhones, up 61 percent year-on-year. Apple has also sold 3.27 million iPads since its launch in April. But Q3 didn't include the 3 million iPhone 4s Apple says it has sold since launching it June 24, so Q4 will probably feature similarly eye popping sales figures.
Microsoft, meanwhile, faces more uncertainty in mobile as it prepares to roll out Windows Phone 7 devices and Windows 7-powered slates by the holiday season. It's impossible to say at this point whether these products will succeed, but given the plethora of competing products on the market, it may take some time for Microsoft to gain momentum in this space.
If Microsoft does get its mobile situation worked out, the comparisons with Apple will probably die down a bit. But Microsoft's stock has been mostly flat for the better part of a decade, while Apple's has, in the past three years, been growing at such a rate that you almost wonder if they're doing something illegal.
So even if Microsoft does surpass Wall Street's expectations and report higher Q4 revenue than Apple, people are still going to make comparisons between the two companies. If there's any meaning to be pulled out of this, it’s that Microsoft has lost at least some of the dominance it once had in corporate IT circles, says Oh.
"Everyone talks about the 'consumerization of IT,' with people bringing devices into work and forcing IT managers to think about being more platform-agnostic. They're now treating Mac and Linux like first class citizens," Oh said.