A tale of two other business models

Even as Hollywood actor Richard Gere tried to quell the storm over a public kiss (Watch the kiss that caused all the fuss ) he gave a Bollywood star Shilpa Shetty at an AIDS awareness event, apologizing Friday for any offense, it was business as usual elsewhere.

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Now that Apple and Microsoft has released their quarterly results, I am almost in time for crafting a tale of two other business models. Look up the related reports here, here and here.

Apple today announced financial results for its fiscal 2007 second quarter ended March 31, 2007. The Company posted revenue of $5.26 billion and net quarterly profit of $770 million, or $.87 per diluted share. These results compare to revenue of $4.36 billion and net quarterly profit of $410 million, or $.47 per diluted share, in the year-ago quarter. Gross margin was 35.1 percent, up from 29.8 percent in the year-ago quarter. International sales accounted for 43 percent of the quarter's revenue.

Apple shipped 1,517,000 Macintosh computers and 10,549,000 iPods during the quarter, representing 36 percent growth in Macs and 24 percent growth in iPods over the year-ago quarter.

Microsoft's revenue for the quarter rose 32 percent to $14.4 billion, and net earnings rose to $4.93 billion, or 50 cents a share, from $2.98 billion, or 29 cents a share, in the same period last year. Both figures benefited from the deferral of $1.67 billion of revenue from the previous quarter to account for the Windows and Office upgrade coupons distributed late last year. Even better, from the analysts' point of view, was that there were no unpleasant surprises in the company's outlook, with earnings forecast between $1.68 and $1.72 a share for fiscal 2008, and revenue between $56.5 billion and $57.5 billion.

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What it all boiled down to was that, fears and perceptions aside, Windows Vista and Office 2007 have gotten off to strong starts. Chief Financial Officer Chris Liddell reportedly said consumer sales of Vista surpassed the company's own expectations by $300 million to $400 million. "There is very good acceptance from a launch perspective for the product. It's early days, but we're encouraged by it," Liddell seems to have told Reuters.

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Microsoft trails Google and Yahoo in making money from Web searches, but online services revenue edged up 11 percent to $623 million in the quarter. Online advertising revenue grew 23 percent year over year, and Liddell said "revenue per search" is higher than a year ago, when the company was still using a third-party ad platform.

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Wall Street analysts were relieved and heaved a collective sigh of relief.

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Wow, what a business ! Some day I’d like to see one of our companies to notch up numbers like that.