The quarterly numbers are in the books for Google, Apple and Microsoft , and while Apple and Google made money, Microsoft failed to report a profit for the first time in 23 years as a public company.
Crazy Times, Crazy Results
It seems unfathomable that Apple continued to do well in this recession, but as I wrote on Thursday in Apple Earnings Continue to Defy Logic, while Apple's computer sales dipped, and iPod revenue (as opposed to sales) remained flat, the iPhone and the App Store carried the day. Meanwhile, the National Business Review reports that at a recent earnings call Google reported a very respectable 8.9 percent increase in profits.
Microsoft on the other hand had a devastatingly bad quarter compared to its biggest rivals. Microsoft's reported 32 percent profit plunge was all the more shocking since they had never reported a loss as a public company. Microsoft hopes to rebound with the release of Windows 7, which could be out soon, but a Microsoft blog post on Friday indicated that Win7 would include a way to run in XP mode, which makes make wonder why I would buy a new OS to run in a mode like my old OS. Meanwhile Microsoft CEO Steve Ballmer used the economy as an excuse, but if his big rivals were making money, it begs the question, why was Microsoft doing so poorly?
How Low Can it Go?
A BBC video report on the Google quarterly results quoted Eric Schmidt as saying, "the economic situation is uncharted territory and no company is recession proof." Indeed, an analyst quoted in the video suggested that Google would grow more slowly in the future, and they would have a hard time sustaining growth, even at a slower rate, if they continued to make their money from only internet ads.
As Schmidt points out, it's hard to know where this is going, but it seems of the three companies Apple's has the most diverse product line, selling a variety of hardware, software and services. Google sells some services, but is mostly an ad revenue machine, Microsoft is almost entirely a software company (XBox and Zune not withstanding).
Ultimately, all three companies are going to be fine for a long, long time, but for one quarter at least, it looks like Apple and Google get a chair and Microsoft is left standing alone and blue as the battle for dominance continues.
"The world's largest software maker said profit dropped by 32% to $2.98bn (£2bn). Sales slipped to $13.65bn."
But you're right. They did report a profit, so I probably should have chosen my words more carefully. It was the first time they failed to report growth from the previous year's figures, which is different than no profit all.
My basic premise is correct, however, that while Google and Apple gained in their year over year figures, Microsoft lost ground.