Taking Stock Of 2 Tech Giants: What's Next For Apple And Microsoft
RENEE MONTAGNE, HOST:
And Microsoft is going through some major restructuring. Just last week, the company announced the biggest job cuts in its history, up to 18,000 employees. It was the boldest move to date by the new CEO Satya Nadella. Yesterday, he spoke about Microsoft's financial situation on a quarterly earnings call, and the company Apple also reported its earnings. For more, we reached NPR's Aarti Shahani in San Francisco. Good morning.
AARTI SHAHANI, BYLINE: Good morning.
MONTAGNE: Now, yesterday, Apple and Microsoft each reported their earnings for the third quarter of this year. How are they doing?
SHAHANI: Well, Apple just beat Wall Street's expectations. The company is very indebted to China for that. They reported strong iPhone sales to customers over in that country, and overall, that income rose about 7.7 billion. So that's 12 percent over the same time last year - so solid double-digit growth. Over at Microsoft, net income was down, and that's because Microsoft spent money buying Nokia, the phone maker. So Wall Street was harping on about how the company fell short of expectations, but the total revenue was up 18 percent and slightly better than what analysts had expected.
MONTAGNE: And on this earnings call - it was just a few days after CEO Satya Nadella had axed a whole lot of jobs. Did he talk about that?
SHAHANI: In a way - not explicitly - often the buzzword in Silicon Valley is innovation, innovation. But Nadella talked a lot about discipline. The word discipline came up a lot. And the conventional wisdom here in Silicon Valley is that the company is bloated. Apple makes way more money than Microsoft, for example. But Microsoft has more than twice the number of employees, and that's after you count the mega job cuts. One former Microsoft worker I spoke to - somebody who'd left voluntarily - compared the company to federal workers in India, which is Nadella's home country - the stereotype being that it's full of bureaucrats with really cushy jobs but - who don't work too hard because they can never get fired.
MONTAGNE: So with Microsoft cutting jobs and cutting costs, it sounds like a real culture change for the company.
SHAHANI: Yes, it is a huge culture change - a shakedown. And in some ways that's this company that is a giant that has to now think of itself as an underdog. Back in the 1990s, Microsoft had a software monopoly when it came to Windows, and now there are other operating systems. You have IOS and Android. And on the call, Nadella talked about getting Microsoft products like Office 365 into iPhone and Samsung Galaxies. So it's really no ego - let's just slip into what's there. And one of his goals is, clearly, to make Microsoft the mobile app of choice for professionals, you know, who have to flip between phones and computers at home and at work.
MONTAGNE: And we have just a second here left Aarti, but why don't we talk, finally, about Apple. What's next?
SHAHANI: Well, for starters, Apple is giving Microsoft a run for its money with some stiff competition for enterprise customers. Apple just partnered with IBM. Apple CEO Cook did not talk about much about the much-anticipated iPhone 6 which should come out at some point. We don't know when. It'll have a bigger screen. And what I'm really waiting for is for Apple to give us something that's really crazy, trippy, out there like a futuristic iWatch that might stream my e-mail and twitter, maybe plot my heart rate and blood sugar level and calorie count and control my home thermostat with a Siri voice command or something like that.
MONTAGNE: That was NPR's technology correspondent, Aarti Shahani, speaking to us from San Francisco. Thanks very much.
SHAHANI: Thank you.