Apple Strong Q4, Will Windows 7 Cause Apple Setback?

By Gene Quinn
October 19, 2009

Apple® today announced financial results for its fiscal 2009 fourth quarter ended September 26, 2009. The Company posted revenue of $9.87 billion and a net quarterly profit of $1.67 billion, or $1.82 per diluted share. These results compare to revenue of $7.9 billion and net quarterly profit of $1.14 billion, or $1.26 per diluted share, in the year-ago quarter. Gross margin was 36.6 percent, up from 34.7 percent in the year-ago quarter. International sales accounted for 46 percent of the quarter’s revenue. Apple sold 3.05 million Macintosh® computers during the quarter, representing a 17 percent unit increase over the year-ago quarter, but with Microsoft’s much anticipated release of Windows 7 slated for later this week, will Apple be able to continue on its growth curve or will they suffer a setback as a result of consumers migrating over to or back to the Microsoft platform as a result of Windows 7 and the timely death of Vista? Personally I think Apple will continue to grow and the release of Windows 7 will only help Apple, not hurt them in any way.

I have been a Windows user for about the last 14 years. Before that I had only Apple computers and started using Windows based machines only after I became a practicing attorney. The firm I joined used Windows machines, and if I wanted to be compatible at all I had to transfer over to Windows myself. Since then I have had only Windows based machines, and increasingly Microsoft has become hostile towards its users not caring whether they release a product that works at all, let alone one that works well. It is no great newsflash that Vista is terrible, but what is worthy of comment is that in order for Vista users to rid themselves of the virus that is Vista it is necessary to upgrade to Windows 7 and pay the Redmond Giant a fee for the privilege of getting rid of a horribly flawed operating system and into Windows 7. I know that Windows 7 has received rave reviews, but I have absolutely no desire to find out for myself. I am going to be switching to Apple within a matter of weeks. In fact, had Micro Center had the Mac computer I wanted in stock I would have made the switch a few days ago, but soon enough I will rid myself of the vista virus! I am not about to pay what I view as an extortion payment to Microsoft for an unproven, untested operating system despite the review of Windows 7.

When exactly did we stop expecting computers, software and gadgets to work upon buying them? It seems almost fanciful to imagine a new release of a product that doesn’t come with an assortment of glitches, and it is well beyond the capability of Microsoft to launch an operating system that is user friendly, usable and not full of security holes. And now they have the audacity to give up on Vista because it is so bad and charge users for the privilege of getting something that we should have been provided in the first place; namely a working operating system.

Any more it seems that the Microsoft trademark stands for inferior quality, lack of compatibility, inevitable security flaws and lots of wasted time. I can only begin to imagine the lost productivity and drag on the US economy caused by having to deal with Vista. To quote Samuel L. Jackson’s character Jules from the movie Pulp Fiction: “sewer rat may taste like pumpkin pie, but I’d never know cause I wouldn’t eat…” it. That is how I feel about Windows 7. It could be the world’s greatest operating system and make the Apple operating system look unusable garbage, but I will never know because I am through with Microsoft operating systems. I have wasted far to much time over the years, and Vista was a mistake of epic proportions. Unfortunately of Microsoft, Vista probably wasn’t even the worst mistake Microsoft made in terms of operating systems, but it will be the last mistake I am willing to subject myself to.

In any event, in addition to selling over 3 million Macintosh® computers during the quarter, Apple also sold 10.2 million iPods, representing an eight percent unit decline from the year-ago quarter. Apple sold 7.4 million iPhones in the quarter, representing seven percent unit growth over the year-ago quarter. Despite the drop in iPod sales, Apple sold more Macs and iPhones together than in any previous quarter, and according to Apple’s CEO, Steve Jobs, Apple has “a very strong lineup for the holiday season and some really great new products in the pipeline for 2010.” Peter Oppenheimer, Apple’s CFO, said that for the first quarter of 2010 he expect “revenue in the range of about $11.3 billion to $11.6 billion and we expect diluted earnings per share in the range of about $1.70 to $1.78.” So all seems good for Apple.

I don’t know how many people share my frustration with Vista, but I have not spoken to anyone who thinks Vista was anything other than a failure. I hear a lot of optimism regarding Windows 7, but isn’t that always the case when Microsoft launches something new? I do believe this time is different, and there is really some reason to be optimistic regarding Windows 7, after all Microsoft couldn’t lay two enormous eggs in a row, could they? Of course they could, and whether Windows 7 is good, bad or just plain ugly there are likely going to be a lot of people skeptical even if they do have enough blind faith to lay down the funds to upgrade out of Vista.

But what really will happen when Microsoft launches Windows 7? According to Brian Marshall of Broadpoint AmTech, who is quoted in a Computer World article, there has been no negative impact for Apple as a result of the last four Windows launches.  In fact, new Windows launches “almost act like a delayed accelerant on Mac sales.”  Time will tell whether that is the case relative to Windows 7, but I suspect it will be.  Unfortunately, the last quarter of 2009 will likely be a good one for Microsoft.  They will not only have revenues relating to a new operating system, but the legions of those who unfortunately bought a Vista infected machine will likely upgrade, further rewarding Microsoft for unleashing a not yet ready for prime time operating system.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 13 Comments comments.

  1. Toby October 19, 2009 8:38 pm

    And what exactly are your complaints about Vista? It sounds like you’ve synthesized a whole bunch of vague internet criticisms and incorporated them as your own. If you have to Google this question to give an answer, don’t bother. Rather hurry off to your Mac so you can pay $2k to check your e-mails, browse the web and edit photos.

  2. Gene Quinn October 19, 2009 9:15 pm

    Toby-

    Problems with Vista? Don’t tell me you are a Microsoft defender? No need to Google anything. Vista is horribly flawed as an operating system for many, many reasons, including the fact that cut and paste does not reliably work, Internet Explorer crashes constantly, many peripherals are not compatible with Vista, much software is not compatible with Vista, customized software business software I need for patent searching is not compatible with Vista, Vista machines have destroyed several external hard drives, Vista machines have destroyed a series of wireless mice and a series of keyboards, Toshiba prevents access to be able to downgrade from Vista, there are extreme security holes, Vista unnecessarily hogs tremendous resources and on and on and on…

    If you need me to explain the problems of Vista you obviously have never used a Vista machine, or perhaps you have never used a non-Vista machine, thereby having nothing to compare to.

    I have no intention of paying $2,000 for a computer, and thankfully that will not be necessary when I purchase an Apple. I will, however, get a computer that will last for many years longer than a PC using the MS operating system de jour.

    So tell me, why exactly does my preference for an Apple computer or just a computer that reliably works without bugs cause you so much distress?

    -Gene

  3. Max October 19, 2009 9:52 pm

    I have used Windows 7 Beta version and I think its great. Win 7 is the best operating system of all time. I also think its much better than Snow Leopard. I have stopped using my Mac notebook since I installed Win-7.

    One more thing I don’t think that Win 7 release will help Apple’s sales in fact I think its gonna hurt in the notebook sales. Vista wasn’t good with notebook and Linux isn’t use friendly, that’s why lots of people switched to Apple, people who required notebook had to go with Mac. But now things has changed. Windows 7 works fine with notebook, so nobody needs to spend $1,100 on Mac when they can get much faster notebook with Windows 7 on half the price. Its just common sense specially in this tough economic time. Why would someone who isn’t die hard Mac fan will buy it when notebook with Win 7 is available on half the price.

    Besides new version on Snow Leopard sucks, its more like a Service Pack, which Microsoft offers as free upgrade.

  4. New Orleans Computer Repair October 20, 2009 5:05 am

    The real question: Will iPhone rain on Windows 7 parade?

  5. Fact Checker October 20, 2009 11:08 am

    I’m gonna have to agree with Toby. None of this is substantiated. Most people who actually used Vista and didn’t just read blogs about others who bash it, but didn’t use it themselves, found it a more-than-suitable OS. It’s quite obvious that Gene has an issue with Microsoft and that it has nothing to do with their product. Try to actually do research on this subject instead of watching the Vista-bashing “I’m a Mac” TV spots and gaining all of your subject matter from 30 sec unreliable smear ads. Windows 7 is a great OS and if your judgement is too clouded to swallow your pride and admit this, then why are you writing tech articles? I have used Vista and Mac OSX Leopard and service pack Snow Leopard and Windows 7 is the real deal and Apple-only users will have to get used to it.

  6. Gene Quinn October 20, 2009 11:27 am

    Fact Checker-

    Believe what you want, but I am a Vista user and I hate Vista. I know no one who has used Vista that likes Vista. The fact that there are any supporters of the obviously flawed Vista is astounding. Are you all getting paid by Microsoft to go around and promote Vista and Windows 7?

    Others can believe what they want, but it is extraordinarily curious that folks are saying how wonderful Windows 7 is and how they have used it and love it even BEFORE it has been released. So either they are lying or they for some reason had access to Windows 7 prior to release, which would suggest they are beta testers, tech reviewers or Microsoft cronies who were given early copies for the purpose of promoting the release.

    I will also just point out “Fact Checker” that you did not address any of the flaws I mentioned in my response to Toby. So your comment here is really much ado about nothing, and not based on any factual reality.

    -Gene

  7. Fact Checker October 20, 2009 12:48 pm

    Genie,

    Apparently you haven’t heard that Microsoft allowed any users the oppurtunity to test Windows 7 before launch, something you won’t see Apple doing anytime soon. I don’t have to defend Vista to a Machoholic, you’ve made up your opinion about Microsoft. Luckily, it seems that there are not many readers or commenters here, so your anti-Windows rubbish will reach very few. As a writer for a widely-read computer website, I think you’d be curious to know that I consistently receive nothing but praise concerning Windows 7 from both Mac fanboys and Windows users. I guess not everybody who uses a Mac is as biased as you appear to be.

  8. Fact Checker October 20, 2009 12:50 pm

    And, Yes, I am getting paid by Microsoft to visit blogs and defend their OS because with two days until Windows 7’s launch, they have nothing better to do….brilliant!

  9. Gene Quinn October 20, 2009 1:39 pm

    Facts You Need to Check-

    You say that you are a: “writer for a widely-read computer website”

    You don’t say? Really? I would never have guessed that to be the case in a million years! You prove my point. Thank you.

    You say: “it seems that there are not many readers”

    Believe what you want, but in this niche I have far more readers than most, and whether you like it or not this is an extremely influential blog that readers a readership you couldn’t possibly imagine.

    I think it is clear who needs to do some fact checking.

    -Gene

  10. Al October 23, 2009 2:13 pm

    @Max

    Windows 7 – Best operating system of all time..”

    Let me guess – you held a Windows 7 release party. How much of the “best os in the world” koolaid did you serve up?

    “people who required notebook had to go with Mac”
    What? If they were using Windows, they could’ve stuck with XP in their notebook.

    You sound like a Windows apologist that has never even touched a Mac. While Snow Leopard may have been an update, it focuses on improving performance, efficiency and reducing its overall memory footprint compared to its predecessor Mac OS X v10.5 “Leopard”, rather than new end-user features. In some cases, as much as 7 gigs were freed up after the upgrade. While there are a few interface tweaks and additions, there is improvement in the 64 bit architecture, MS Exchange Support added, and improvements in the use of multicore processors. Besides, the quality of Leopard means that Snow Leopard did not need the the kind of major overhaul that is Windows 7. In my book, puts Snow Leopard well ahead of Windows 7. Enjoy your Vista Service Pack 7.

  11. His Irateness October 26, 2009 12:59 pm

    You seem to be -very- openly hostile to Windows, and Microsoft in general, for no particularly discernible reason other than, perhaps, a strange “David vs. Goliath” syndrome. You’ve consistently criticized MS for being slow and unwieldy but you, just on the cusp of what could be a tipping point in the “OS Wars” (a term I’ve long since given up on, both OS’s have always had their niches and always will; only if you’re a heavy user in one field can you determine which OS; Mac, UNIX, LINUX, Windows or Amiga is actually better for you) you’re switching to what could be the loosing side…

    …5 years after the abandoned some of their dumber business practices and their more insidious side has started to show clearly through. You might ALSO wanna look at the premier Office suite for Mac a little more closely; Redmond has it’s mark on the Apple platform too, and has had it for years so you’re not going to escape their “clutches” as easily as just switching OS’s.

    For someone who encourages innovation you might also wanna look at what Apple does if you try and use their OS on other hardware; say, a processor that wasn’t made by Intel.

    Have fun paying 75% more for a machine that does 25-50% less! 😀

  12. Gene Quinn October 26, 2009 1:19 pm

    His Irateness-

    Openly hostile for no reason? You must be referring to Mac haters, not me. The only reason that someone would think that what I say is unreasonable is if they have never used a machine with a Microsoft OS. Microsoft has gotten worse over the years, more problems, more of a hog on resources, more security flaws and then Vista flat out was not compatible with much of anything. I am not going to waste any more time with Microsoft.

    As far as paying 75% more for a machine that does 25-50% less, I think you left off the “1” and mistakenly used the word “less,” because surely you meant “125-150% more!” On top of that, the computers I purchase with MS operating systems have never been cheaper than an Apple machine. I don’t buy the cheap stuff, so if I am going to pay the same price I would rather have a machine that works. The only reason I haven’t done this previously is because I have so much invested in peripherals and software, but since those are not compatible might as well get a machine that works.

    Like the new Mac commercials so appropriately say, the hype associated with Windows 7 has all been heard before, and there are always problems. So do yourself a favor and take this opportunity to move over to a Mac!

    -Gene

  13. jaime May 14, 2010 7:43 am

    Tastes apart, my experience with Vista is not so bad, at least in comparison with the other Windows releases and also with some of the Mac previous OSs. Maybe we have passed so many nightmares that are now conformists… but understand me well I have seen nightmare problems the same horrible both in PC and Mac. I have now a Vista 2GB portable where I spent too much time and never had any issues with peripherals or networks, including routers, Wifi, printers, hard disks etc. Also the compatibility with newest and also older video and audio formats is much better in my experience than the XP SP3 that I use in my office, for example Vista read more and better rare non autorun DVD formats would like to know if it is possible and will worth Win-7.

    Anyway I have to buy a desktop now and I would like from an objective user if he recommends PC or Mac thinking in the best way to pass to 64 bits and the RAM limitations that I suppose will soon affect to the 32bit machines without troubles, being able as I need to have access to some multimedia resources with some flexibility (in this I am totally lost in view of the XP and Vista control panels in comparison with the maybe outdated, but at least for me more accessible and comprehensible previous OSs multimedia control) and of course hoping that most of the time to work with a computer tool is not to devote to the computer itself but to the thing you have to do.

    Thanks, for what I can learn here…