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Microsoft says its attack on Apple's Mac business is working (MSFT, AAPL)

surface book review 0786 Windows PCs are starting to chip away at Apple's dominance of the high-end computer market, Microsoft CFO Amy Hood said on an earnings call Thursday.

Overall, Microsoft's business of licensing Windows out to PC manufacturers was up 5% last quarter, Hood says, accounting for both business and consumer PCs.

Breaking that down, Hood said that Microsoft's business of licensing Windows for the "non-pro" (as in, consumer) market had its own 5% growth last quarter, beating the overall shrinkage of the PC industry, "as our partner ecosystem continued to see growth and share gains in the Windows premium device category."

Microsoft defines "premium devices" as computers that are in the $900-plus price range. That segment has long been Apple's strongest market, with its popular iMac and MacBook lines commanding luxury prices for what the company pitches as a more user-friendly computing experience.

Meanwhile, many of Microsoft's PC partners spent the last several years focusing on low- to medium-priced computers, sacrificing Apple's philosophy of high margins and instead trying to make it up in volume. Meanwhile, Apple entrenched its position as the computer manufacturer of choice for the discerning power user.

But when Microsoft launched its Surface Book laptop back in the fall of 2015, the company explicitly declared that those days were over, pitching it as a more powerful and versatile alternative to Apple's flagship MacBook Pro. The intention, Microsoft said, was to prove to the PC manufacturers that there was room in the market for high-end Windows machines. Amy Hood Microsoft CFO Melia Robinson/Business Insider

At the same time, the growing market for laptop/tablet hybrids like the Surface Pro 4, and the slow rise of virtual reality headsets like Facebook's Oculus Rift — which requires a powerful gaming PC for the best results — are driving demand for higher-end Windows machines. And Dell, Asus, Lenovo, and HP are increasingly making those PCs.

More recently, Microsoft introduced the Surface Studio PC, a unique blend of tablet and desktop computer, competing with the Apple iMac. And while the Surface Studio isn't cheap, starting at $2,999, it's reported to be selling better than even Microsoft's most optimistic projections.

Combine that with the fact that Microsoft had previously said that disappointment in the newest line of MacBook Pro laptops drove people towards the Surface this last holiday season, and you start to see how Microsoft's attack on Apple might be working.

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