Apple round-up: profits, Papermaster and politics
Recent financial figures show Apple is much stronger compared with Microsoft than many realize. Meanwhile Apple has found a role for its latest high-profile hearing, and a public relations exec says its political donations could affect internal morale.
AppleInsider picks up some interesting figures from Apple and Microsoft’s most recent financial reports. While Microsoft has a higher revenue and profit for the quarter, the gap isn’t as wide as you might think. Once you include iPhone business (some of which is left out of the most prominent figures because it involves ongoing subscription payments rather than one-off purchases), Apple’s revenue is 78 percent that of Microsoft while its profit is 56 percent of Microsoft’s level.
Those figures make a couple of common perceptions less certain. Apple may seem like a much smaller company because of the Mac OS vs Windows market, but all those hardware sales really add up. And the disparity in profits suggests either Microsoft is much better at keeping costs in check, or the image of Apple applying heavy mark-ups to produce premium-pricing isn’t accurate.
The biggest surprise comes with the figure for cash, cash equivalents and short-term investments. That’s an accounting figure which, to grossly over-simplify, pretty much works out as, how big a pile of banknotes could the firm put together on relatively short notice?. It turns out that Apple’s $24.5 billion actually trumps Microsoft’s $20.7 billion.
That doesn’t necessarily tell you anything about how the firms are run ““ some would argue that long-term investments, physical assets and intellectual property have much more worth ““ but it does show that Apple is certainly no financial underdog.
Elsewhere, Apple has now announced that former IBM executive Mark Papermaster will take on the role of senior vice president of devices hardware engineering. In practice he’ll be in charge of the hardware side of iPods and iPhones. Because that post is notably different to his previous work on ultra-thin servers, Apple may stand a better chance of defeating IBM’s lawsuit which aims to uphold a no-compete clause in Papermaster’s contract.
Finally, MacWorld has an interesting take on Apple’s financial support for opponents of Proposition 8, a proposed law to ban gay marriage in California (which goes before voters today). It quotes the head of a cause-marketing firm who argues that there’s little risk of a serious consumer backlash and that taking a stand on social issues can even enhance a company’s image. However, she argues the real danger may be in the potential offence to employees who are upset that money they’ve helped earn goes to a cause they disapprove of.
