Has anyone noticed that Microsoft used to be just 100x more profitable than Apple...
And now Apple has 3% market share compared to about 90% for Microsoft... yet, Apple made NEARLY 1/2 the total revenues of Microsoft for the last fiscal year??? Some 20Billion for Apple to almost $44Billion for Microsoft.
That has GOTTA be a slap in the face for Microsoft, wouldn't you say?
Just think how much money Apple would be making if IT had 90% of the marketshare instead... Would it be in the Trillions?
People have been debating this point everywhere. The main points are:
Apple makes Hardware + Software
Microsoft just makes Software
Software has a HUGE gross margin, because it costs so little to manufacture and a fairly big net margin because "programming and R/D" is not a volume dependent cost.
Hardware has a smaller gross margin, but a higher price point
The price of WinXP is about the same price of a iPod
Microsoft has consistently high profit due to high margins
Microsoft has a relatively low revenue due to lower price points of their product
For every PC sold, microsoft only has a equivalent revenue of $xxx (I would guess $100 or so, and so an equivalent gross profit of about $95 and net income of about $50.)
While for every Mac sold, Apple has an equivalent revenue of $xxx (I would guess $1,500 and an equivalent gross profit of about $500 and an equivalent net income of about $200).
I would say revenue indicates a RELATIVE SIZE of the company. While net income or net margin indicates the RELATIVE PERFORMANCE of the company.