by Shane O'Neill

At Least Microsoft Admits We’re in a Recession

Oct 30, 20083 mins
Data Center

Apple often reminds me of that well-to-do friend who’s always buying rounds of drinks and shows up one day with a new car at a time when everyone else is counting pennies. 

You admire his fun, cavalier spending and lack of anxiety, but you have to wonder: Where does it all come from? Will he run out? Isn’t he worried? 

We are in an economy that is, by all accounts, on the verge of a recession. 

Is Apple worried? Not really. 

If it is, Mr. Jobs and company ain’t showing it. One could argue they have no compelling reason to worry. The company did just experience a “record breaking” quarter for iPhone, iPod and Mac shipments with revenue and profits that beat their own forecasts. Earlier this month, Apple refused to budge on prices for its new MacBook and MacBook Pro laptops, while prices for PC alternatives dip everyday. 

“We’re not economists,” Jobs said during an earnings call that sounded too laid-back for these times. He added: “We may get buffeted by the waves a bit, but we’ll be fine.” 

God bless him. I’ve always admired people who don’t panic, who are relaxed and self-assured even when the guns are on them. Patriots quarterback Tom Brady jumps to mind. Muhammad Ali. FDR. 

But is Steve Jobs FDR, or is he more like a certain erratic Republican candidate who believes “the fundamentals of our economy are strong”? 

Microsoft, on the other hand, is like all your normal friends: concerned and cautious about the economy, a bit hopeful and a bit solemn. 

The software giant did experience a 9 percent year-over-year increase in revenue for its Q1 2009, but took a hit on its most important division, the Windows client division (that is, Vista), which grew a paltry 2 percent. But despite the mostly good news, Microsoft made a point during its earnings call to concede that the economy is in trouble and they are worried about it. 

Microsoft described a three-part plan to endure the current economic crisis. It also lowered its revenue and earnings expectations for fiscal 2009. Microsoft’s CFO Chris Liddell said an economic recovery during the second half of the fiscal year is “unlikely to occur” and that “there’s a high degree of uncertainty in outlook based on the state of the economy.” 

Ahhh, some good old-fashioned realism. Thank you for being worried Microsoft.

Hey, Apple probably will end up “fine.” (Doesn’t it always end up that way?)  But in my mind, Microsoft’s respectful recognition of the looming recession and how it affects customers and partners trumps Apple’s relative nonchalance.