As a rule of thumb, I think it's a lot easier to make more revenue as hardware company selling products worth hundreds of dollars at a time. Samsung made $37 billion in revenue in Q3 last year, for example, and HP makes about the same, too.
The only problem with these companies is that they don't really know how to maximize their profits. They usually compete on price and release many models with increases costs due to complexity, so profits end up being a smaller % of the revenue.
You are right in general, but here we are not comparing AAPL's revenue vs GOOG's revenue. AAPL's profit is more than GOOG's revenue. Now that's definitely remarkable.
That's not a surprise. They're in completely different businesses.
Google is a display advertising company that occasionally puts out a better display (Chrome, Android). Apple is in the business of finding and extracting value from hardware markets no one else took seriously.
That's exactly why I don't understand all this fighting.
They are each other's perfect complement! Apple has plenty of experience building hardware and OS's. Their core business is to SELL physical or virtual goods (devices, songs, whatever). They don't care that much about the services. For them, services are just a mean to sell something. Something to add value to something they want to sell. e.g.: Introducing iCloud! Use it on your Mac and your iSomething.
Google on the other side, is in the business of SHOWING things. They don't care about selling you something. It's more of a problem for them to sell, than it is to just give it to you for 'free'. They are a service company. Mainly, an advertising company. That's why they don't try to sell their phones to everyone (e.g.: nexus one). They just want you to see what they have to show. So, while you are seeing it, they can show you a few ads.
They bought Android, so they could accelerate and expand their market of eyes seeing their ads.
But they should ally with Apple. Apple wants to sell, Google wants to show you things. Do you want a video for free? Go to YouTube. Do you want to buy music ? Go to Apple Store.
There's no sense in keep fighting each other.
And of course, there comes Microsoft, with its own search engine, their own store, their own mobile OS... trying to fight both of them. And they are trying hard to resurrect.
That's not the way I see it. Google realizes that Apple with a strong majority share of the mobile market would be free to ignore Google entirely. They could severely reduce Google's ability to advertise by controlling mobile app ads. Google needs something like Android to ensure some fair play I believe. If mobile is to eclipse desktop usage, they can't be left out. But in any case Apple can keep going as it is. It's cash cow might die someday but by then it will have so much money they would have a century's worth of cash for R&D to find a new niche.
One thing bodes well for Google so far, Apple has struggled getting any kind of traction in the Online space. It's early for iCloud but it's still far from the competition.
I wrote something between those lines 10 days ago (http://news.ycombinator.com/item?id=3463957), so, I can understand Google's interest on having it's own mobile OS. But that's not a reason for them to start a war that is not on their best interest. Apple wins having Android around, so they can escape of being accused of monopolistic practices (e.g. no other Browser banned from their OS? Remember Microsoft?), Google wins, by having another channel of distribution for their ads.
And both of them complement each other nicely.
Yes, Google historically has more robust services than Apple. Better, though? Apple's corporate DNA has them pushing for more control over their products, and outsourcing to Google doesn't serve this goal. Remember, Apple would rather release a product considered by techies to be lacking in features than to release something with a sub-par experience.
Google products tend to be reliable, and their design sense is improving. But their products tend toward functional rather than elegant; more importantly their products are designed to sell ads. This priority tends to be at odds with Apple's goal of selling products that people love to use.
At the moment I think it is more likely that Apple learns to do online services well (their missteps notwithstanding) rather than Google suddenly caring about users more than advertisers.
The only problem with these companies is that they don't really know how to maximize their profits. They usually compete on price and release many models with increases costs due to complexity, so profits end up being a smaller % of the revenue.