A Computing Milestone: Apple's Profits Pass Microsoft

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The Microsoft era is officially over. Today the software giant announced its third quarter earnings and, for the first time, was less profitable than Apple. Apple edged out Microsoft by a cool $700 million with $5.99 billion in profits for the quarter ending March 31 compared to Microsoft's $5.23 billion. For years, Microsoft's larger profits had been a source of pride for Microsoft apologists in their disgust for Apple fanboys. Now their last shred of dignity has been stripped from them—something they didn't let go of easily, says TechCrunch's MG Siegler. "Just about a year ago, when Apple passed Microsoft in market cap, the Redmond loyalists were out in full force: that means nothing — look at the revenues! When Apple passed Microsoft in revenues last October, it was: who cares — look at the profits!" Now those days are over. But if it's any consolation, Business Insider's Matt Rosoff points to the last financial metric Microsoft fanatics can hang onto: margins.

"Microsoft's net profit as a percentage of revenue was 32%," he writes. "Apple's was 24%. That's unbelievable and spectacular for a hardware company, but software has much lower cost of goods -- once you've recovered your R&D investment, every sale is pure profit -- and Microsoft is still primarily a software company." So there's that.

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