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%.

Apple's war chest, in terms of cash and cash equivalents, is larger than Microsoft's, $34 billion to $33 billion, taking long-term debt into account (Apple has none).

And as far as market share, that depends what market you're looking at.

The bar graph above shows the Mac's share of the U.S. personal computer market, which has inched up to 9.4%, according to IDC.

Meanwhile, the iPhone's share of the worldwide smartphone market has grown from 2.8% to 13.3%, according to Gartner, while Windows Mobile has been relegated to "Others." And the iPod continues to command roughly 70% of the MP3 player market; Zune's share hovers around 2%.

The consensus on Wall Street is that Microsoft has turned a corner, and both Apple and Microsoft rallied last week. But over the past year — since we last did this exercise — Apple's shares have grown four times faster.

Below, as promised, last year's version of the bar chart:

Date: Oct. 26, 2008

Click on the chart to see last year's post.

Thanks to reader Mark Taylor for the suggestion.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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:

• 15% of the teens surveyed own an iPhone, up from 8% six months ago
• 22% planned to buy an iPhone in the next six months, up from 16% in April
• 87% own an iPod, up slightly from last year
• Of the 40% of teens who plan to buy an MP3 player in the next 12 months, 74% intend to buy an iPod and 13% a Microsoft (MSFT) Zune
• Most teenagers (57%) still download their music over peer-to-peer networks, but of those who buy their digital music legally, 93% use iTunes

If there was a weak spot in the survey for Apple, it was in the video games report. Despite Cupertino's concerted effort to market the iPod touch as a game machine, the console is still king among American teenagers. Fully 65% of those surveyed said they were unwilling to buy cellphone games, just slightly less than the 69% who said they had no interest in PC games.

The 600 high school students questioned about iPhones, MP3 players and online music were part of a larger survey of 11,200 teenagers interviewed online and in school. The 1,200 teens in the school survey came from households with an average income of $74,000 a year, representing the top 30% of U.S. households.

The 10,000 teens in the online survey — Piper Jaffray's largest to date — came from households with an average income of $52,000, which is closer to the U.S. median ($42,000).

"We believe that the teen demographic is a critical component of long-term growth in the digital music and mobile markets," wrote Piper Jaffray's Gene Munster in a report to clients issued Tuesday afternoon, "and Apple is taking its leading position in music and mobile markets."

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.

Jose Pinero, Microsoft's director of communications for Micrsoft's TV, video, and music business, thinks the combination of HD radio, a new Smart DJ feature, and more than 6 million songs available in the Zune marketplace (for a monthly subscription fee of $14.99) will be a revelation for music fans.

Music lover's device?

"It's not about doing 40 different things," Pinero says. "If you love music and video, this offers the riches experience you can get."

He also emphasizes that this is hardly a self-contained device. Come November, the Zune video store will be available to 20 million Xbox Live subscribers. It'll work as both a gaming device and the larger version will hold up to three HD movies. "You can buy a movie through Xbox Live, and it's instant-on. You can start watching the movie, sync to your Zune, and finish watching it at the gym," he says. "You can watch it on your TV, in your living room, on your PC, or your portable device. It's buy once, play anywhere."

The device's Smart DJ feature will also work over the Internet, so Zune Pass subscribers can log onto Zune.net at a friend's house and still access the extensive song catalog and recommendations.

Put it all together and it appears to be an impressive product release for Redmond.

The Zune HD looks great, has an impressive web browser and some cool new features, and will soon plug into Xbox Live service. So, it'll no longer be an embarrassment to be seen carrying a Zune. It's not unusual for Microsoft to take this long to get a product right. The question is whether this time, the market has truly moved on.