Microsoft and Apple Corporation - Fiscal Year 2010 Report

Microsoft and Apple Corporations Annual Report Comparison

The purpose of a corporate annual report is to communicate to stockholders and other interested parties its financial statements. The annual report is a summary of the corporation's operations over the previous twelve months time period and states the corporation's plans for the future. Many annual reports are created to resemble a corporate brochure, using lots of pictures, color, charts and graphs. Despite the fancy look, however, the main purpose of the report is to provide the year's financial data, which comes from the corporation's accounting system. Microsoft and Apple's annual reports' main sections include: income statements, balance sheets, cash flow statements, and stockholder's equity statements.

Microsoft has many good and not so good factors that influence their financial performance. For instance, their highest quarterly revenue occurs on the second quarter because of the corporate calendar and spending trends by consumers. Global macroeconomic factors also have a strong relationship to demand of software, services hardware, and online offerings. In 2010, revenues increased mainly due to the strong sales of Windows 7 and the PC market improvement in comparison to 2009. However, if sales decrease, so will the revenues which would be not so good for the Microsoft Corporation. For example, if Microsoft should have a major problem with one of their programs, such as Windows 7 or upcoming Windows programs, people would be less likely to purchase them and go with another company who may be a little bit cheaper and one that is less likely to have problems.

One of Microsoft's largest competitors is Apple Corporation because of the iPhone, and iPad. These are of little threat due to the fact that just because you can do a lot of the same things on these as you can an actual PC. In addition, the percentage of Internet usage on mobile devices has been doubling every eight months or so and if you extrapolate that trend, it is easy to imagine a world in which mobile devices consume 20% or more of total Internet usage within the next few years. Also, in the past decade, Apple's stock rose by close to 900% as compared to about 35% fall in Microsoft's shares. However, with Microsoft's efforts in 2010 like Windows Starter 2010, apps store, Bing search engine, Yahoo-deal for ad-sharing, Windows Mobile 7.0, Zune platform, Windows 8 operating system and Project Natal, will undoubtedly compete with Apple and others effectively.

Microsoft's primary assets, which do not show up on the balance sheet at all, include software and software development skills. Some of their primary assets include, but are not limited to, Windows, Microsoft Disk Operating System, DirectX, Xbox, Microsoft Office, Microsoft TV, and Virtual PC. In contrast, Apple's primary assets include, but