Apple vs Microsoft Overview
The two most valuable technology companies in the world take different approaches: Apple leads in consumer hardware and services, while Microsoft dominates enterprise software and cloud computing.
| Metric | Apple (AAPL) | Microsoft (MSFT) |
|---|---|---|
| Sector | Consumer Electronics | Enterprise Software |
| Market Cap | $3.4T | $3.0T |
| Revenue | N/A | N/A |
| Net Income | $123.9B | $88.1B |
How Does Apple Make Money?
Apple (AAPL) operates in the Consumer Electronics sector with a market cap of $3.4T. For a full breakdown of Apple’s revenue sources, see the Apple revenue breakdown.
Apple Revenue Breakdown
| Segment | FY2024 (Sep) | FY2023 (Sep) | YoY Growth |
|---|---|---|---|
| iPhone | $201.2B | $200.6B | +0.3% |
| Services | $96.2B | $85.2B | +12.9% |
| Mac | $30.0B | $29.4B | +2.0% |
| iPad | $26.7B | $28.3B | -5.7% |
| Wearables, Home & Accessories | $37.0B | $39.8B | -7.0% |
| Total Revenue | $391.0B | $383.3B | +2.0% |
How Does Microsoft Make Money?
Microsoft (MSFT) operates in the Enterprise Software sector with a market cap of $3.0T. For a full breakdown of Microsoft’s revenue sources, see the Microsoft revenue breakdown.
Microsoft Revenue Breakdown
| Segment | FY2024 (Jun) | FY2023 (Jun) | YoY Growth |
|---|---|---|---|
| Intelligent Cloud | $96.0B | $83.4B | +15.1% |
| Productivity & Business Processes | $79.9B | $69.3B | +15.3% |
| More Personal Computing | $62.6B | $54.7B | +14.4% |
| Total Revenue | $245.1B | $211.9B | +15.7% |
Apple vs Microsoft Profitability
Apple: Yes, Apple is profitable. The company reported net income of $123.9B on total revenue of $391.0B. With an operating margin of 38.2%, Apple demonstrates solid profitability for the consumer electronics sector. The gross margin of 46.2% reflects Apple’s pricing power and cost structure.
Microsoft: Yes, Microsoft is profitable. The company reported net income of $88.1B on total revenue of $245.1B. With an operating margin of 44.6%, Microsoft demonstrates solid profitability for the enterprise software sector. The gross margin of 69.8% reflects Microsoft’s pricing power and cost structure.
Key Financial Metrics Comparison
Apple Key Metrics
- Gross Margin: 46.2% — Record high, driven by Services mix shift. Services carry ~72% gross margins vs. ~37% for products.
- Operating Margin: 38.2% — Among the highest of any company at this scale globally.
- Net Income: $123.9B — Apple earns more profit than nearly any company in history.
- Free Cash Flow: $108.8B — Apple returned $95B+ to shareholders through dividends and buybacks.
Microsoft Key Metrics
- Gross Margin: 69.8% — Exceptionally high for a company with $245B in revenue, reflecting software’s low marginal cost.
- Operating Margin: 44.6% — Among the highest operating margins of any mega-cap company globally.
- Azure Growth: +29% — The KPI Wall Street watches most closely. Azure growth has reaccelerated due to AI demand.
- Intelligent Cloud Operating Margin: ~46% — Cloud is Microsoft’s most profitable segment.
Which Company is a Better Investment?
Both Apple and Microsoft are significant players in the Technology space. Investors should consider each company’s revenue growth trajectory, profitability, competitive positioning, and exposure to secular trends before making investment decisions. Review the full Apple revenue breakdown and Microsoft revenue breakdown for detailed analysis.
Disclaimer: This comparison is for informational purposes only and does not constitute investment advice.