How Microsoft sold more phones than Apple

Author

Scott Campbell

July 24, 2014

The firm outperformed its long-standing rival on mobile device sales

When technology giants Apple and Microsoft both released their financial results on Tuesday, a long-standing rivalry was at play.

In 1994, Apple filed a lawsuit in the US courts in an attempt to prevent Microsoft and Hewlett-Packard from using similar graphical elements to its Lisa and Macintosh operating systems. However, the court ruled against Apple, saying that it could not “get patent-like protection for the idea of a graphical user interface”.

Since then, Apple has surged ahead with constantly increasing sales of the iPhone and rapid growth around the world. For all intents and purposes, the California-based firm has eclipsed Microsoft, particularly in the mobile market.

But one extraordinary fact emerged on Tuesday. Microsoft sold more phones than Apple during the past quarter – but only because of a technicality.

In its earnings statement, the company said that it sold 5.8m Lumia smartphones and 30.3m non-Lumia phones, totalling 36.1m – higher than Apple’s 35.2m iPhone sales.

However, the devices were actually made by Finnish communications manufacturer Nokia, which sold its phone business to Microsoft for £4.6bn in April. Although phone sales brought in $1.99bn (£1.17bn) of revenue, the cost to Microsoft was $1.93bn, so it actually only made $53m from the sales. Additionally, the company admitted that a “majority” of the Lumia smartphones were shifted at low prices.

“Microsoft is in a position to make a play here if they’re going to get serious about this,” market analyst Merv Adrian of Gartner told The Telegraph.

He added: “It’s certainly true that Apple gets an enormous amount of attention from a community that remains enamoured by its design. Microsoft is sometimes the forgotten company here, and that’s ok. They’re more than happy to have a little more time to deliver on their vision.”

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