Microsoft reported a smaller quarterly profit than Apple for the first time in 20 years as the iPad ate into sales of laptop computers.
Microsoft’s net income for the quarter was $5.2 billion compared to Apple’s $5.99 billion. According to Bloomberg, that’s the first time in 20 years that Apple’s quarterly profit eclipsed Microsoft’s. The milestone comes after Apple passed Microsoft in market capitalization last year.
Pat Becker, Jr., principal of Becker Capital Management, says there’s “no doubt” that the iPad is cannibalizing laptop sales, at Microsoft’s expense. Along those lines, revenues in its Windows segment fell 4.4% to $4.5 billion, which was “in line with the PC trends,” according to a statement from the company. Microsoft is banking on Windows 8, which is likely to appear in beta form this summer and hit the mass market in 2012, to revive consumer PC sales.
Happily for Microsoft, other divisions of the company are doing better. Revenues for the company’s Business Division grew 21% year over year. “The enterprise has been doing a refresh and upgrade and Microsoft’s been riding that wave,” Becker says. The Entertainment & Devices Division also grew its revenues 60% year-over-year thanks to the successful introduction of Kinect for Xbox 360 and continued strong sales for Xbox 360.
Despite those numbers, Microsoft seems to be feeling the heat from Apple and Google among others, as evinced by a company-wide pay raise given out last week, according to the Financial Times.