Well this is embarrassing. Apple has bested Microsoft in third quarter revenue. The iPad maker recorded a record $20.34 billion this quarter, compared to Microsoft’s $16.20 billion. This is, however, to be expected given Apple’s lock over the portable hardware market.

he one area Microsoft still leads is profit margin. The company reported $5.41 billion compared to Apple’s $4.31 billion. Apple’s profit margin was below expectation this quarter as it dealt with keeping costs low for the iPad and the extra expense of a free bumper program in response to problems with the iPhone 4.

Microsoft’s biggest portion of profits reported were from sales of Office, which garnered $5.13 billion.