Apple really is the king. The company's revenue in the just-reported June quarter was an astonishing $15.7 billion, well above what Wall Street expected and likely somewhat higher than what Microsoft will report on Thursday. I want to underline that development: For the first time in years -- and, likely, ever -- Apple is bringing in more money than Microsoft.
Earlier this year, there was a big flutter when Apple's market cap passed that of Microsoft. While that was interesting, it's not necessarily significant since market cap (number of shares times the stock price) can be wildly inflated. Back in the dotcom days, some no-account Internet stocks were so highly valued that companies with little revenue and nothing but red ink on the books had bigger market caps than companies earning billions of dollars a year. Ultimately, those pretenders disappeared. (Remember Pets.com?)
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But sales are another story -- and so are profits. Apple's net income jumped nearly 80 percent to $3.25 billion, or $3.51 per share, from $1.8 billion, or $2.01 per share a year ago. And that sales number I mentioned? That represents an increase of 61 percent over last year.
As for Microsoft, Wall Street expects the software giant to report revenue of $15.2 billion and a profit of $2.8 billion. If we needed more evidence that we've reached the end of Microsoft's reign, we now have it.
Microsoft: Stuck in the Windows past
To be clear, I'm not predicting the imminent fall of Microsoft -- far from it. Microsoft remains an enormously profitable company that has a lock on its core markets. Like Apple, Microsoft may well exceed Wall Street's numbers and inch ahead of its rival in sales -- but that doesn't really matter.
The driving force of innovation -- and now profitability -- is no longer the PC desktop. It's the world of mobile devices and mobile applications, which are, of course, the very skill sets that Microsoft can't seem to master.