Both companies beat expectations last week, but only one of them was growing

Click to enlarge. Source: Company reports, Oct. 2009.

A year ago we ran a bar graph similar to the one at right. It showed that Apple (AAPL), despite the Mac's tiny market share compared with Microsoft (MSFT) Windows, was gaining on the software giant. The main reason: revenue pouring in from the iPhone but hidden as deferred earnings in Apple's balance sheet. (That chart is posted below the fold.)

Last week Apple and Microsoft once again reported quarterly earnings — and enjoyed nice pops on the stock market. But their growth rates turn out to be very different.

This quarter, deferred iPhone revenue isn't as big a deal for Apple as it was last year (non-GAAP earnings actually grew more slowly than GAAP; see here for why). Ironically, it was Microsoft that had to use deferred revenue from Windows 7 to show any growth at all. Otherwise, Microsoft's revenue for the third quarter was down 14% year over year and its earnings down 17%.

Apple's revenue, meanwhile, grew 25% and its income 46.6%.

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Photo: Apple Inc.

Apple (AAPL) tends to score well in Piper Jaffray's "Taking Stock With Teens" reports, but the results of PFC's 18th semi-annual survey, released Tuesday, suggest that American teenagers are growing even more loyal to the Apple brand.

iPhones, iPods and iTunes emerged as clear winners in the Minneapolis-based brokerage house's study of the music and cellphone buying preferences of some 600 middle-class and upper middle-class teens.

"It's really a story about Apple," said Andrew Murphy, representing Piper Jaffray's technology team. "Apple continues to dominate."

Among the findings: More

Redmond's MP3 player goes hi-def. Should Apple be worried?

On the heels of Apple's (AAPL)  iPod event last week, Microsoft (MSFT)  is unveiling its latest offering in the MP3 player market, a sleek high-definition device capable of playing HD movies and HD radio known as, appropriately, Zune HD.

Available in 16GB and 32GB versions at $220 and $290, Zune HD features a vibrant organic LED color screen with multi-touch technology. Retail outlets will sell both platinum and black versions, while several other colors will be available at Zuneoriginal.net. It's Wi-Fi enabled with a web browser, so movies and music can be downloaded on the go or at Zune.net. The company was planning to have as many as 500 HD (720p) movies available for rent/sale by today. It also plans to feature a few free applications  at launch in the Zune Marketplace, including a calculator, weather, and some games. In the next few months, apps for Twitter and Facebook  will become available, as well as several 3D games including Project Gotham Racing.

Microsoft  has enjoyed some impressive early reviews for the product, which is clearly aimed at Apple's iPod Touch device.

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