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ACKNOWLEDGEMENT

We take this opportunity to express our profound gratitude and deep
regards to our Faculty Dr. Lakshmi Devasena for her exemplary
guidance, monitoring and constant encouragement throughout the course
of this project. The blessing, help and guidance given by her time to time
shall carry us a long way in the journey of life on which we are about to
embark.

We also take this opportunity to express a deep sense of gratitude to our
parents, seniors and friends for their valuable suggestions and guidance,
which helped us in completing this task through various stages.

Lastly, we would like to thank all the people who have taken the survey
conducted by our team. We are grateful for their cooperation during the
period of our assignment.





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TABLE OF CONTENTS
ABSTRACT...3
LITRATURE REVIEW.4
Paper1: Windows phone beating iPhone.......4
Paper2: Apple Vs Microsoft...6
INTRODUCTION12
Apple Introduction...12
Apple Timeline.14
Microsoft Introduction.16
Microsoft Timeline...18
RESEARCH METHODOLOGY.....20
SURVEY ANALYSIS....21
FINDINGS & ANALYSIS....30
FINANCIAL STATEMENT ANALYSIS.34
CONCLUSION.39
REFERENCE.........40
ANNEXURE.41





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ABSTRACT

This project deals with two major IT Companies namely Apple Inc. and Microsoft
Corp. These two companies have been compared on the basis of their financial
statements that is balance sheet and income statement. A survey of 100 MBA
Students was taken collecting their views on their purchases, reason for those
purchases, about service and quality, and there future preferences.
A comparative analysis of both companies has been done to reveal advantages and
disadvantages of both companies with respect to the other company.












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Literature Review
Paper 1: Windows Phone Beating iPhone In 7 Countries: What That Means
For Microsoft and Apple
According to a new report from the research firm IDC Windows Phone has topped
BlackBerry in 26 markets and the iPhone in seven. Shaw didn't divulge those seven
mysterious markets in his blog post, but when The New York Times contacted
IDC, an analyst named Kevin Restivo shared their identity.
And the countries where Windows Phone has topped the iPhone are:
1. Argentina!
2. India!
3. Poland!
4. Russia!
5. South Africa!
6. Ukraine!
7. A market IDC identifies as "the rest of Central and Eastern Europe," which
includes Croatia!
None of these markets, obviously, bring in the sales numbers of the United States
or China; indeed, three of them, the Times notes, meant less than 100,000 handset
shipments for Microsoft. And, also, we're talking about shipments and not sales,
meaning that Microsoft is bragging about how many devices it sent to retailers, and
not how many phones it had actually sold to end users.
Still, though, topping the iPhone anywhere represents a small victory for Windows
Phone, Microsoft's late-to-market mobile operating system which really only
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debuted in its current form about three years ago. Since then, the story behind
Windows Phone has been that it has struggled to gain market share from industry
leaders iOS and Android, despite huge advertising spending
campaigns; enthusiastic reviews from tech critics and journalists and a partnership
with what was the world's largest mobile phone maker, Nokia.

And yet even with all that firepower, Windows Phone has languished in the single
percentage points for market share, both worldwide and in the United States,
failing to catch on with a broader populace in any meaningful way.

So while winning Poland might not seem like anything to brag about (especially
for a mega-corporation like Microsoft), Microsoft and its Windows Phone division
will surely accept and blast out any kind of victory, no matter how minor it might
appear. If all those Jessica Alba and Cam Newton and Gwen Stefani Windows
Phone advertisements start paying off in America, there is no doubt that Microsoft
will be sharing those accomplishments as well.

Apple, meanwhile, probably isn't shaking in its figurative boots over this news.
These markets are small and business is quite robust elsewhere.
There is some reason to pause, however: Apple's failure to infiltrate markets like
India (where it is apparently losing to Windows Phone) speaks to a wider issue
facing the iPhone in emerging economies. In countries like China and India,
carriers do not subsidize the cost of the phone for the customer like they do in the
United States, which means that shoppers are paying full price for the phone
upfront. In other words, new iPhone 5 costs something like $700 instead of $200,
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which has proven prohibitive for many Indian and Chinese shoppers and has, at
least in part, prevented Apple from gaining a foothold in those markets.

A budget iPhone -- or iPhone nano, or iPhone mini, whatever you want to call it
is Apple's long-rumored solution to that problem, an iPhone that is cheaper to
make and that would cost less upfront money. Apple has once again been predicted
to release a budget iPhone in summer 2013, thereby attacking Android's
dominance in China (and in all seven of the countries listed above). If the appeal of
the iPhone is so weak in those countries that it is getting defeated by Windows
Phone, then Apple will need a different approach to secure any kind of momentum
there.

And so we will wait to see if Apple does indeed out an iPhone nano this year, or if
it is happy to surrender those emerging markets to Google and Microsoft in return
for continued appeal in the West.

Paper 2: Apple versus Microsoft: the ticker tape tells the tale
Windows 8 was released to the general public exactly six months ago.
During that time, the PC industry has contracted sharply and Windows 8 buyers
have been less than fully enthusiastic.
The conventional wisdom is that Microsoft is flailing and Apple is a productivity
machine. Apples products are uniformly loved and Microsofts are unable to get
any traction.
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And yet the companys stock prices have gone in completely opposite directions
since the launch of Windows 8. This chart begins on the day Windows 8 was
released to the public.

Now, the market has been known to be dead wrong before. But its odd to see this
big a divergence between public perception and market performance.
Last week Microsoft released its quarterly results. This week Apple weighed in
with its numbers. That gave me a chance to look at both companies in a little more
detail. And when I did, I saw far more similarities than differences, including two
CEOs who have drawn their share of fire from critics who think they need to be
replaced.
At Microsoft, Steve Ballmer gets dinged for the companys inability to make any
serious inroads into the mobile category. After six months on the market, neither
Windows Phone 8 nor Windows 8 has managed to get out of the single digits in
terms of usage.
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And yet the company managed to increase its profit 19 percent over the
corresponding quarter last year. How? by concentrating on the boring, yet highly
profitable units that most tech bloggers yawn at. Microsoft Business Division
(responsible for Office 365, which is about to become a billion-dollar business)
and Server and Tools (with multiple billion-dollar businesses under its umbrella)
are both bigger than Windows.

Meanwhile, the Windows Division reported flat revenues even though PC
shipments dropped by 14 percent during the same period. Ive read several
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critiques from armchair financial analysts implying that Ballmer and Co. are
somehow cheating by including its new Surface hardware line in the Windows
Divisions results.

But thats Microsofts strategy for Windows, part of its initiative to become a
devices and services company. You can argue about the execution of that
strategy, and you can place bets on whether it will succeed. But theres nothing
timid or tentative about it. And then theres Apple. Superficially, its business looks
as
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diversified as Microsofts, with revenue and profits coming from a variety of
products.
But in the same quarter where Microsoft's profits were up 19 percent, Apple's were
down almost 18 percent.
Theres no question that Apple will sell lots more iPhones and iPads. But as CEO
Tim Cook acknowledged on the earnings call, We acknowledge that our growth
rate has slowed and our margins have decreased from the exceptionally high level
we experienced in 2012.
In developed markets, Apple has masterfully executed against its plan to sell high-
priced, high-margin products to the wealthier segments of the buying public. But
theres evidence that that market is saturated, and the first-mover advantage is
gone. On the same earnings call, Cook conceded as much: We can't control items
such as exchange rates and world economies and even certain cost pressures.
Growth for Apple in its existing product lines means appealing to more price-
conscious buyers and moving into markets where the $618 average selling price of
an iPhone isnt an option.
Is there another breakthrough hardware product in Apples back pocket? Its hard
to believe that a smart watch or a TV has the potential to define a category as the
iPhone and iPad did.
Maybe services? Revenue on the iTunes/Software/Services line in Apples just-
completed quarter was up 30 percent. But as the latest 10-Q report makes clear,
thats a by-product of the larger installed base of iOS devices:
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This increase was due primarily to growth of iTunes [which] reflects continued
growth in the installed base of iOS devices and expanded iTunes digital content
and applications offerings around the world, resulting in higher net sales on the
App Store and higher net sales of digital content.
Outside of iTunes, Apple hasnt exactly excelled at delivering services to its own
customer base, let alone expanding those services to a larger market. So its hard to
see that as a real growth opportunity.
Indeed, thats the real difference between Steve Ballmers Microsoft and Tim
Cooks Apple. Ballmer has a significant challenge in one division that represents
about a quarter of his companys revenue, while other divisions are growing
steadily outside the gaze of the gadget-obsessed tech press.
Meanwhile, Apple has become downright boring and predictable. As Felix
Salmon wrote after seeing Apples latest numbers:
Todays earnings report marks the point at which Apple is officially no longer a
high-growth tech stock, valued on its monster potential. Instead, it has become a
cash cow, valued on its ability to pump hundreds of billions of dollars into its
shareholders pockets.
That's actually a fairly accurate description of Microsoft's performance in the
Ballmer era. And given the challenges of the economy and a fickle technology
market, it's a significant accomplishment for both men.
In short, regardless of the stock market's vicissitudes, neither company is doomed.
And I suspect neither CEO is going anywhere soon.

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APPLE
Apple Inc., formerly Apple Computer, Inc., is an American multinational
corporation headquartered in Cupertino, California that designs, develops, and
sells consumer electronics, computer software and personal computers. Its best-
known hardware products are the Mac line of computers, the iPod music player,
the iPhone Smartphone, and the iPad tablet computer. Its consumer software
includes the OS X and iOS operating systems, the iTunes media browser,
the Safari web browser, and the iLife and iWork creativity and production suites.
The company was founded on April 1, 1976, and incorporated as Apple Computer,
Inc. on January 3, 1977. The word "Computer" was removed from its name on
January 9, 2007, the same day Steve Jobs introduced the iPhone, reflecting its
shifted focus towards consumer electronics.
Apple is the world's second-largest information technology company by revenue
after Samsung Electronics, and the world's third-largest mobile phone
maker after Samsung and Nokia. Fortune magazine named Apple the most
admired company in the United States in 2008, and in the world from 2008 to
2012. However, the company has received criticism for its contractors' labor
practices, and for Apple's own environmental and business practices.
As of May 2013, Apple maintains 408 retail stores in fourteen countries as well as
the online Apple Store and iTunes Store,
[21]
the latter of which is the world's largest
music retailer.
[22]
Apple is the largest publicly traded corporation in the world by
market capitalization, with an estimated value of US$415 billion as of March 2013.
As of Sept 29 2012, the company had 72,800 permanent full-time employees and
3,300 temporary full-time employees worldwide. Its worldwide annual revenue in
2012 totaled $156 billion. In May 2013, Apple entered the top ten of the Fortune
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500 list of companies for the first time, rising 11 places above its 2012 ranking to
take the sixth position.
[23]

19982005: Return to profitability
On August 15, 1998, Apple introduced a new all-in-one computer reminiscent of
the Macintosh 128K: the iMac. The iMac design team was led by Jonathan Ive,
who would later design the iPod and the iPhone. The iMac featured modern
technology and a unique design, and sold almost 800,000 units in its first five
months.
[69]

200507: Transition to Intel


The MacBook Pro, Apple's first laptop with an Intel microprocessor, announced in
January 2006.
At the Worldwide Developers Conference keynote address on June 6, 2005, Steve
Jobs announced that Apple would begin producing Intel-based Mac computers in
2006.
[83]
On January 10, 2006, the new MacBook Pro and iMac became the first
Apple computers to use Intel's Core Duo CPU. By August 7, 2006 Apple had
transitioned the entire Mac product line to Intel chips, over one year sooner than
announced.
[83]
The Power Mac, iBook, and PowerBook brands were retired during
the transition; the Mac Pro, MacBook, and MacBook Pro became their respective
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successors. On April 29, 2009, The Wall Street Journal reported that Apple was
building its own team of engineers to design microchips.

200711: Widespread success
Apple achieved widespread success with its iPhone, iPod Touch and iPad products,
which introduced innovations in mobile phones, portable music
players and computers respectively. In addition, the implementation of a store for
the purchase of software applications represented a new business model. Touch
screens had been invented and seen in mobile devices before, but Apple was the
first to achieve mass market adoption of such a user interface that included
particular pre-programmed touch gestures.

Delivering his keynote speech at the Macworld Expo on January 9, 2007, Jobs
announced that Apple Computer, Inc. would from that point on be known as Apple
Inc., because computers were no longer the main focus of the company, which had
shifted its emphasis to mobile electronic devices. The event also saw the
announcement of the iPhone and the Apple TV.
[90]
The following day, Apple
shares hit $97.80, an all-time high at that point. In May, Apple's share price passed
the $100 mark.





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2011present: PostSteve Jobs era


Apple store in Yonkers, New York
On January 17, 2011, Jobs announced in an internal Apple memo that he would
take another medical leave of absence, for an indefinite period, to allow him to
focus on his health. Chief operating officer Tim Cook assumed Jobs' day-to-day
operations at Apple, although Jobs would still remain "involved in major strategic
decisions for the company." Apple became the most valuable consumer-facing
brand in the world.
[110]
In June 2011, Steve Jobs surprisingly took the stage and
unveiled iCloud, an online storage and syncing service for music, photos, files and
software which replaced MobileMe, Apple's previous attempt at content syncing.

This would be the last product launch Jobs would attend before his death. It has
been argued that Apple has achieved such efficiency in its supply chain that the
company operates as a monopsony (one buyer, many sellers), in that it can dictate
terms to its suppliers. In July 2011, due to the American debt-ceiling crisis, Apple's
financial reserves were briefly larger than those of the U.S. Government.


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Microsoft

Microsoft Corporation is an American multinational software corporation
headquartered in Redmond, Washington that develops, manufactures, licenses, and
supports a wide range of products and services related to computing. The company
was founded by Bill Gates and Paul Allen on April 4, 1975. Microsoft is
the world's largest software maker measured by revenues.[4] It is also one of the
world's most valuable companies.

Microsoft was established to develop and sell BASIC interpreters for the Altair
8800. It rose to dominate the personal computer operating system market with MS-
DOS in the mid-1980s, followed by the Microsoft Windows line of operating
systems. The company's 1986 initial public offering, and subsequent rise in its
share price, created an estimated three billionaires and 12,000 millionaires from
Microsoft employees. Since the 1990s, it has increasingly diversified from the
operating system market and has made a number of corporate acquisitions. In May
2011, Microsoft acquired Skype Technologies for $8.5 billion in its largest
acquisition to date.

As of 2013, Microsoft is market dominant in both the PC operating system
and office suite markets (the latter with Microsoft Office). The company also
produces a wide range of other software for desktops and servers, and is active in
areas including internet search(with Bing), the video game industry (with
the Xbox and Xbox 360 consoles, and the upcoming Xbox One console), the
digital services market (through MSN), and mobile phones (via the Windows
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Phone OS). In June 2012, Microsoft announced that it would be entering the PC
vendor market for the first time, with the launch of the Microsoft Surface tablet
computer.

In the 1990s, critics began to contend that Microsoft used monopolistic business
practices and anti-competitive strategies including refusal to deal and tying, put
unreasonable restrictions in the use of its software, and used misrepresentative
marketing tactics; both the U.S. Department of Justice and European
Commission found the company in violation of antitrust laws.
On August 20, 2013, Microsoft announced that its CEO, Steve Ballmer, will retire
from the company after a successor is chosen.[7]

198494: Windows and Office
While jointly developing a new OS with IBM in 1984, OS/2, Microsoft
released Microsoft Windows, a graphical extension for MS-DOS, on November
20, 1985.[8]:242243, 246Microsoft moved its headquarters to Redmond on
February 26, 1986, and on March 13 the company went public; the ensuing rise in
the stock would make an estimated four billionaires and 12,000 millionaires from
Microsoft employees.[17] Due to the partnership with IBM, in 1990 the Federal
Trade Commission set its eye on Microsoft for possible collusion; it marked the
beginning of over a decade of legal clashes with the U.S.
Government.[18] Microsoft announced the release of its version of OS/2
to original equipment manufacturers (OEMs) on April 2, 1987;[8]:243
244 meanwhile, the company was at work on a 32-bit OS, Microsoft Windows NT,
using ideas from OS/2; it shipped on July 21, 1993, with a new modular kernel and
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the Win32 application programming interface (API), making porting from 16-
bit (MS-DOS-based) Windows easier. Once Microsoft informed IBM of NT, the
OS/2 partnership deteriorated.

19952005: Internet and the 32-bit era
Following Bill Gates's internal "Internet Tidal Wave memo" on May 26, 1995,
Microsoft began to redefine its offerings and expand its product line into computer
networking and the World Wide Web.[25] The company released Windows 95 on
August 24, 1995, featuring pre-emptive multitasking, a completely new user
interface with a novel start button, and 32-bit compatibility; similar to NT, it
provided the Win32 API.:20 Windows 95 came bundled with the online
service MSN, and for OEMs Internet Explorer, a web browser. Internet Explorer
was not bundled with the retail Windows 95 boxes because the boxes were printed
before the team finished the web browser, and instead was included in the
Windows 95 Plus! pack.[28] Branching out into new markets in 1996, Microsoft
and NBC Universal created a new 24/7 cable news station, MSNBC.[29] Microsoft
created Windows CE 1.0, a new OS designed for devices with low memory and
other constraints, such as personal digital assistants.[30] In October 1997, the
Justice Department filed a motion in the Federal District Court, stating that
Microsoft violated an agreement signed in 1994 and asked the court to stop the
bundling of Internet Explorer with Windows.

200610: Windows Vista, mobile, and Windows 7
Ballmer also emphasized the need to continue pursuing new technologies even if
initial attempts fail, citing the original attempts with Windows as an example.[39]
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Released in January 2007, the next version of Windows, Windows Vista, focused
on features, security, and a redesigned user interface dubbed Aero. Microsoft
Office 2007, released at the same time, featured a "Ribbon" user interface which
was a significant departure from its predecessors. Relatively strong sales of both
titles helped to produce a record profit in 2007.[42] The European Union imposed
another fine of 899 million ($1.4 billion) for Microsoft's lack of compliance with
the March 2004 judgment on February 27, 2008, saying that the company charged
rivals unreasonable prices for key information about its workgroup and back
office servers. Microsoft stated that it was in compliance and that "these fines are
about the past issues that have been resolved".[43]

2007 also saw the creation of a multi-core unit at Microsoft, as they followed in the
steps of server companies such as Sun and IBM.[44]

2011present: Rebranding, Windows 8, and Surface
Following the release of Windows Phone, Microsoft underwent a
gradual rebranding of its product range throughout 2011 and 2012the
corporation's logos, products, services, and websites adopted the principles and
concepts of the Metro design language.[52] Microsoft previewed Windows 8, an
operating system designed to power both personal computers and tablet computers,
in Taipei in June 2011.[53] A developer preview was released on September 13,
and was replaced by a consumer preview on February 29, 2012.[54] On May 31,
2012, the preview version was released.


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RESEARCH METHODOLOGY

Research Design
A research design is purely and simply the framework or plan for a study
that guides the collection and analysis of data. The survey research was
used in this project, because consumers feedback was necessary for
obtaining the data.
Data Sources
Primary data is collected by the questionnaire based market survey.
Secondary data was obtained from journals, magazines, newspapers, books
and the Internet.
Research Instrument
For doing the survey research, structured questionnaire with both open-
ended and closed-ended questions are used.
Sample Size
Sample size refers to the number of respondents we are surveying.
Sample Unit
This study was basically an opinion survey of the clients in all different
departments who are regular with their dealings. This survey was self
designed.
Place of Study
Hyderabad, India


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QUESTIONNAIRE

The survey was carried out on the MBA students comprising of one questionnaire,
aiming at the customers of Apple and Microsoft. The questions were designed to
capture the market trends, the grounds behind such a trend, the peripherals related
to the functioning of the stores, key marketing strategies adopted and finally aimed
at drawing the inferences and conclusions for the same.
Q1. Have you purchased the product from Apple Inc?

92% have purchased product from Apple




YES
92%
NO
8%
Sales
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Q2. Have you purchased the product from Microsoft?

95% have purchased product from Microsoft.
Q3.Are you satisfied with the Apple product quality?

41% are satisfied with the product quality of Apple.
YES
95%
NO
5%
Sales
YES
41%
NO
59%
Sales
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Q4.Are you satisfied with the Microsoft product quality?

43% are satisfied with the product quality of Microsoft.
Q5. Are you satisfied with the Apple product service?

60% are satisfied with product service of Apple.

YES
43%
NO
57%
Sales
YES
60%
NO
40%
Sales
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Q6. Are you satisfied with the Microsoft product service?

47% are satisfied with product service of Microsoft.
Q7. How does the price of Apples products compare with Microsoft in the industry?

50% think that apple has similar premium price compared to Microsoft while 45% think that
Apple has higher premium price compared to Microsoft.

YES
47%
NO
53%
Sales
Higher premium
price
45%
Similar premium
price
50%
Lower
premium price
5%
Sales
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Q8. Why would you pay product premium price for Apple?

57% are ready to pay product premium price for Apple due to corporate reputation and
availability of software and peripherals.
Q9. Why would you pay product premium price for Microsoft?

65% are ready to pay product premium price for Microsoft due to high quality and design
innovation.
Product
feature
16%
Design innovation
5%
Availability of
software and
peripherals
35%
Corporate
reputation
22%
High-quality
8%
After-sales support
14%
Sales
Product
feature
11%
Design
innovation
33%
Availability of
software and
peripherals
5%
Corporate
reputation
16%
High-quality
32%
After-sales support
3%
Sales
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Q10. Where did you hear about Apples product?

Maximum people heard about apples product from friends and relatives or advertisement on
television.
Q11. Where did you hear about Windows phone product?

Maximum People heard about windows phone from friends and relatives or the internet.
Internet
11%
Magazine or
Newspaper
16%
Advertisement
on TV
27%
Apple store
16%
From relatives
or friends
30%
Sales
Internet
38%
Magazine or
Newspaper
5%
Advertisement on
TV
22%
Mobile store
0%
From relatives or
friends
35%
Sales
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Q12. Which part of the Apples product attracts you compared to Microsoft windows
phone?

Product Integration, Product Quality, and user-friendliness are major reasons that attract iPhone
more than windows phone.
Q13. Why do you think Apple's products are more popular than Windows phone?


Fashionable
appearance design
6%
User-friendly
24%
Product quality
24%
Product
integration
30%
After-sales service
6%
Cost-performance
ratio high
5%
Brand
reputation
5%
Sales
High security
5%
After-sales
service
19%
Marketing and
sales
19%
Corporate
reputation
8%
The CEOs
personal
charisma
16%
Quality and
design of
product
33%
Sales
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Q14. Will you purchase product from Apple in the future?

35% will purchase Apple in the future while 35% are not sure.
Q15. Will you purchase product from Microsoft in the future?

75% will purchase Microsoft in the future while 10% are not sure.

YES
35%
NO
30%
MAY BE
35%
Sales
YES
75%
NO
15%
MAY BE
10%
Sales
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Q16. Which sentence would you see describes Apples products?

Maximum say that Innovative brand leader in fashion best describes Apple.
Q17. Which sentence would you see describes Microsofts products?

Maximum say that Innovative brand leader in fashion best describes Microsoft.
Stand for corporate
culture
8%
Innovative brand
leader in fashion
40%
The king of the
touch technology
32%
Aspirational and
luxurious brand
20%
Sales
Stand for
corporate
culture
27%
Innovative brand
leader in fashion
41%
The king of the
touch technology
19%
Aspirational and
luxurious brand
13%
Sales
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Findings and Analysis
1. From first two questions we can see that both Apple and Microsoft have
been purchased by maximum percentage but Microsoft has been purchased
more than Apple by 3%. By offering an iPhone in the U.S. starting at $99 --
the iPhone 5c made of PLASTIC -- Apple is moving aggressively into the
low end of smart phones. It's a bold strategy intended to attract a whole new
class of consumers. The strategy fully envisions and anticipates the self-
cannibalization of Apple's existing product line.

Self-cannibalization is an Apple hallmark. The company engaged in a brutal
replacement strategy on the iPod, which itself was plunged into slow and
then negative growth mode by the iPhone. Apple also knows about low
prices. The iPod Shuffle was inexpensive from the beginning, as were 99-
cent songs on iTunes.

Microsofts promotional price cut on its Surface Pro tablet is now a
permanent reduction. The Surface products represent Microsofts attempt to
spur sales of Windows-based tablets in an effort to meet the threat posed by
Apples iPad and tablets running Googles Android. While Microsoft has yet
to release unit sales figures, the information it has disclosed about Surface
suggest that the effort has been a costly and largely unsuccessful one for the
company.




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2. People find Apple less satisfying than Microsoft product quality by 2%.
Apple is a premium brand and (till now) its products have cost more than
most of its competitors'. Even if the iPhone 5C is cheaper and simpler, it
will still, presumably, be sold as a solid, high-quality product. But can Apple
uphold this reputation if some of its products betray the weaknesses of pile-
em-high, sell-em-cheap mass production? Take the charging lead for the
iPhone 4 and iPad. Every one of these cables that Ive seen has developed a
split at the end of the lead where it meets the USB plug. It looks like a flaw.
After a bit of normal usage the plastic or rubber opens up and exposes the
silvery wires underneath. The connection carries on working but its surely
only a matter of time before it fails.

When it comes to Microsoft products, servers and tools is where the highest-
quality Microsoft products live. On the developer side, Microsoft's tools
have long been considered among the best in the business. The attention that
Microsoft has lavished on developers has made this an area where the
customers really feel like they are being listened to. And this has led to
products such as Visual Studio that are well-regarded even outside of the
Microsoft developer market.

3. 50% people think that Apples premium pricing is similar to that of
Microsoft while 45% think that Apple has higher premium pricing than
Microsoft.

IPad 5 vs. Surface 2 Price
The cost for both of Apple and Microsoft's upcoming tablets have yet to be
leaked, so prices are based purely on speculation. The rumored costs for
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both tablets are based on the current prices for the Microsoft Surface RT
(ahead of the price cuts) and iPad 4. The 32GB Surface RT, before the steep
discounts, was priced at $499. The 32GB iPad 4 with only WiFi costs $599.
Microsoft is also notable these past months for its extreme price cuts to its
Surface collection after an unsuccessful launch. The iPad 5 will likely be a
more costly choice, but not by an extreme amount.

4. Maximum percentage agrees to pay a higher price for Apple because of
corporate reputation and availability of software and peripherals.

A Sound Investment
Another sound reason for paying extra for the Apple brand is that the
products seem to hold their value very well.

Perceived Value
finally, there is still a common thought among Apple owners (iPad
enthusiasts, especially), that they are getting a great buy for the money.

The Bottom Line
It appears then, that for many, price will never likely be an issue. Those
who refuse to pay the big prices to be part of the Apple story likely wouldn't
have been the market Apple was looking for, anyway.

5. Maximum percentage agrees to pay a higher price for Microsoft because of
corporate reputation and high quality.

33

Microsoft dropped a bombshell at its Xbox One press conference today. It
came on all of a sudden, without a big flashing number or display. It hung in
the air just the same. The Xbox One will retail at $499 when it releases in
November, and that could prove a very dangerous price for Microsofts new
console. It is a price aimed directly at the core gaming community. Hardcore
gamers are the only people who spend that much money on new consoles
theyre the ones who need to experience the biggest, newest games, no
matter what the cost, and theyre the ones who can prop up a system until it
grabs a large enough install base. But theyre also the people who have been
most vocal about their displeasure with Microsoft Xbox Ones used games
policies. To say that the Xbox One is unpopular in the forum communities
right now would be an understatement.

6. Maximum percentage of Apples product were suggested by relatives and
friends or seen on advertisement.

Whereas Microsoft products like the windows phone was seen on the
internet, suggested by relatives and friends or seen on advertisement.

7. People are attracted towards iPhone than towards windows phone because of
product quality, product integration and user- friendliness.

8. People are not sure if they want to buy Apple in the future or not but same is
not the case with Microsoft. A good percentage of people are sure that they
want to buy Microsoft again.

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9. Innovative brand leader in fashion
Both Apple and Microsoft products are described as Innovative brand
leader in fashion. Microsoft again has a higher percentage than Apple.



Financial Statement Analysis

Current Ratio
A liquidity ratio measures a company's ability to pay short-term obligations.

The Current Ratio formula is:





Also known as "liquidity ratio", "cash asset ratio" and "cash ratio. The ratio
is mainly used to give an idea of the company's ability to pay back its short-
term liabilities (debt and payables) with its short-term assets (cash,
inventory, receivables). The higher the current ratio, the more capable the
company is of paying its obligations. A ratio under 1 suggests that the
company would be unable to pay off its obligations if they came due at that
point. While this shows the company is not in good financial health, it does
not necessarily mean that it will go bankrupt - as there are many ways to
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access financing - but it is definitely not a good sign. Higher the current ratio
better it is.






Research and development
Expenditures for research and development are current and capital
expenditures (both public and private) on creative work undertaken
systematically to increase knowledge, including knowledge of humanity,
culture, and society, and the use of knowledge for new applications. R&D
covers basic research, applied research, and experimental development.








36

Debt/Equity Ratio
It is a measure of a company's financial leverage calculated by dividing its
total liabilities by stockholders' equity. It indicates what proportion of equity
and debt the company is using to finance its assets.





Also known as the Personal Debt/Equity Ratio, this ratio can be applied to
personal financial statements as well as corporate ones. A high debt/equity
ratio generally means that a company has been aggressive in financing its
growth with debt. This can result in volatile earnings as a result of the
additional interest expense. If a lot of debt is used to finance increased
operations (high debt to equity), the company could potentially generate
more earnings than it would have without this outside financing. If this were
to increase earnings by a greater amount than the debt cost (interest), then
the shareholders benefit as more earnings are being spread among the same
amount of shareholders.

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However, the cost of this debt financing may outweigh the return that the
company generates on the debt through investment and business activities
and become too much for the company to handle. This can lead to
bankruptcy, which would leave shareholders with nothing.

Profit Margin
A ratio of profitability calculated as net income divided by revenues, or net
profits divided by sales. It measures how much out of every dollar of sales a
company actually keeps in earnings.

Profit margin is very useful when comparing companies in similar
industries. A higher profit margin indicates a more profitable company that
has better control over its costs compared to its competitors. Profit margin is
displayed as a percentage; a 20\% profit margin, for example, means the
company has a net income of $0.20 for each dollar of sales. Looking at the
earnings of a company often doesn't tell the entire story. Increased earnings
are good, but an increase does not mean that the profit margin of a company
is improving. For instance, if a company has costs that have increased at a
greater rate than sales, it leads to a lower profit margin. This is an indication
that costs need to be under better control.



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Return on Equity - ROE
The amount of net income returned as a percentage of shareholders equity.
Return on equity measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have
invested.

ROE is expressed as a percentage and calculated as:

Return on Equity = Net Income/Shareholder's Equity

Net income is for the full fiscal year (before dividends paid to common stock
holders but after dividends to preferred stock.) Shareholder's equity does not
include preferred shares. It is also known as "return on net worth" (RONW).





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Conclusion
Apple hasnt exactly excelled at delivering services to its own customer base, let
alone expanding those services to a larger market. So its hard to see that as a real
growth opportunity.
Indeed, thats the real difference between Steve Ballmers Microsoft and Tim
Cooks Apple. Ballmer has a significant challenge in one division (operating
system) that represents about a quarter of his companys revenue, while other
divisions are growing steadily outside the gaze of the gadget-obsessed tech press.
Meanwhile, Apple has become downright boring and predictable.
This project helps to understand the advantages and disadvantages of Apple Inc.
and Microsoft Corp with respect to the other company.
Microsoft has a higher current ratio, spends more in research and development, has
a favorable debt/equity ratio, has a higher profit margin still in the overall
performance measure Apple is ahead Microsoft.





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References
Literature Review:
http://nanosim.me/windows-phone-beating-iphone-in-7-countries-what-that-
means-for-microsoft/
http://www.zdnet.com/apple-versus-microsoft-the-ticker-tape-tells-the-tale-
7000014556/
Introduction:
http://en.wikipedia.org/wiki/Apple_Inc.
http://en.wikipedia.org/wiki/Microsoft
Financial Statements:
http://www.marketwatch.com/investing/stock/msft/financials/balance-sheet
http://www.marketwatch.com/investing/stock/aapl/financials/balance-sheet
http://www.marketwatch.com/investing/stock/msft/financials
http://www.marketwatch.com/investing/stock/aapl/financials



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ANNEXURE
Questionnaire

Q1. Have you purchased the product from Apple Inc?


Yes


No


Q2. Have you purchased the product from Microsoft?


Yes


No



Q3.Are you satisfied with the Apple product quality?


Yes


No


Q4.Are you satisfied with the Microsoft product quality?


Yes


No


42


Q5. Are you satisfied with the Apple product service?


Yes


No


Q6. Are you satisfied with the Microsoft product service?


Yes


No



Q7. How does the price of Apples products compare with Microsoft in the
industry?


Higher premium price


Similar premium price


Lower premium price


Q8.Why you pay for the product premium price for Apple?


Product feature


Design innovation


Availability of software and peripherals

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Corporate reputation


High-quality


After-sales support


Q9.Why you pay for the product premium price for Microsoft?


Product feature


Design innovation


Availability of software and peripherals


Corporate reputation


High-quality


After-sales support


Q10. Where did you hear about Apples product?


Internet


Magazine or Newspaper


Advertisement on TV


Apple store


From relatives or friends


44


Q11. Where did you hear about Windows phone product?


Internet


Magazine or Newspaper


Advertisement on TV


Apple store


From relatives or friends


Q12. Which part of the product attracts you compared to Microsoft windows
phone?


Fashionable appearance design


User-friendly


Product quality


Product integration


After-sales service


Cost-performance ratio high


Brand reputation


Q13. Why do you think Apple's products are more popular than Windows phone?

45


High security


After-sales service


Marketing and sales


Corporate reputation


The CEOs personal charisma


Quality and design of product


Q14. Will you purchase product from Apple in the future?


Yes


No


Maybe


Q15. Will you purchase product from Microsoft in the future?


Yes


No


Maybe


Q16. Which sentence would you see describes Apples products?


Stand for corporate culture

46


Innovative brand leader in fashion


The king of the touch technology


Aspirational and luxurious brand

Q17. Which sentence would you see describes Microsofts products?


Stand for corporate culture


Innovative brand leader in fashion


The king of the touch technology


Aspirational and luxurious brand

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