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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

January 27, 2015 at 4:44 PM

Apple, Microsoft going opposite ways in China

Microsoft and Apple are having very different weeks.

The same day Microsoft’s stock plunged the most in 18 months on a middling earnings report and gloomy outlook, old rival Apple released a spectacularly good earnings report. The Cupertino, Calif., company earned more profit in the last three months of 2014 than any publicly traded company has ever reeled in during a quarter.

Microsoft sold $26.5 billion in software and devices, taking home $5.8 billion of that in profit. Apple, propelled by sales of its iPhone 6, logged sales of $74.6 billion, and a profit of $18 billion.

Nowhere is the contrast between the rivals clearer than their diverging fates in China.

Apple late last year became the No. 1 smartphone seller in the world’s second-largest economy. Microsoft, which has struggled to sell copies of Windows and Office amid widespread Chinese software piracy, has seen its own Chinese smartphone sales sink to a nigh-irrelevant 0.6% of the market.

The situation is bad enough that Microsoft chief executive Satya Nadella took time during the company’s conference call on Monday to reiterate that the company remains invested in its Chinese operations.

“We have in China currently a set of geopolitical issues that we are working through,” Nadella said, in a comment that could be interpreted as a reference to the antitrust and tax scrutiny Beijing has brought to bear on Microsoft. “We are very committed to China as a market.”

Its more than a case of Microsoft lacking a shiny product like the world-beating iPhone.

Beijing is on a national security mission to wean critical industries off of foreign technology. Its likely that Microsoft’s operating systems and business software mainstays are higher priorities in that effort than Apple’s luxury phones and tablets.

Comments | More in Apple | Topics: apple, china, iphone

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