Microsoft is reveling in the pride of having conquered the PC world with Windows, but here is a major headache for the popular Windows giant. Apple is catching up sooner than expected, though Microsoft is not quiet accepting that the PC world is slowly drifting toward Macdom. Microsoft is comfortable with the myth that Apple has only about 5% worldwide market share of all PCs and servers sold. However, the fourth quarters sales report from Apple is sure to have shocked Microsoft.

The popularity of Bill Gates and Jerry Seinfield failed to boost Vista sales, the ad campaign was a futile kick. RIM, the maker of BlackBerry too has not given up the smartphone race after being beaten in sales record by Apple. Why should Microsoft of all give up now? Steve Jobs learned great lessons from the mistakes of the 80’s and the 90’s and the success of the same period is making it very hard for Microsoft to accept the fact that Apple really has not perished in the technology storm.

Apple is now ahead of Microsoft in terms of sales and revenue comparing the earnings of the two companies’ fourth quarter sales report. The success of the iPhone made the success of other Apple products inevitable in some ways. If Microsoft has to blame anyone/anything, it is definitely the iPhone.

For the quarter that ends in September, Microsoft earned $15.06 billion as revenues, $4.37billion as net profit and has around $20.7 billion in short term investment and reserve cash. Apple in the same period earned $11.68 billion revenue, $2.44 billion in  net profits and has $24.5 billion cash reserve.

The world is changed for both the companies. For Microsoft, the task ahead is to revive the popularity of Windows and keep fixing the bugs with Vista. For Apple, the ultimate aim is to lure more users to jump on to the Mac wagon and  make more sales of iPhones and iPods and hook users to more i-products.