Wuh-oh, it's report card time-- and Apple is probably hard at work learning to forge its parents' signatures, because its grade from Professor Schwab leaves a lot to be desired. As reported by BusinessWeek, Charles Schwab just flunked Apple's stock with a big red "F." That's a report card that's most definitely not worth fifteen free tokens at Chuck E. Cheese. Suppose there was also a note about AAPL frequently snapping gum in class and not sharing the paste?

As his justification for giving such a harsh grade to such a well-loved stock (and one with excellent penmanship, to boot), Schwab senior veep Greg Forsythe provided the following explanation: "We come to this conclusion by looking at the difference between operating cash flow and reported net income. There is some management discretion as to how you report your net income, but in the long run, operating cash flow and net income must converge. If net income is much higher than operating cash flow, the tendency is for net income to fall back in line."

We've alluded to our own complete and utter lack of interest and/or understanding regarding this sort of high-falutin' financial talk before, but just for reference, to our ears, when we read the above passage, this is what we hear: "Blah blah blah blah blahblahblah blah blahblah blah blah blahblahblah blahblah blahblahblah blah yadda yadda yadda blah blah blahblah blah blah blah blah homina homina homina blah blahblah blah blahblahblah blah Polish sausage blah blah blahblah blah Ditka blah." Fascinating, no?

Since we here at the AtAT compound haven't yet sold any of our shares in Apple, it would appear that Mr. Forsythe is characterizing us as "emotional investors." Therefore, we are forced to contradict that erroneous assessment in a calm, detached, and purely objective manner by stating in no uncertain terms that Greg Forsythe can BITE US. So you think Apple's "pretty unattractive across the board," huh, Greg? Well, so's YOUR MOTHER. You want a piece of us? Huh? Make an emotional investment in THIS, buddy-boy!

Meanwhile, sources close to the company report that if Dad ever finds out about this semester's "F," Apple can forget about going to the Autumn Sock Hop.

Predictably enough, Charles Schwab's not the only organization bagging on Apple these days; apparently Giga Information Group Inc. is putting the boot in, too. Whereas Schwab is a "financial services firm" whose job is apparently to tell everyone to sell off their Apple stock before the company spontaneously bursts into flames, Giga is a "global technology advisory firm" whose mission seems to be to predict Apple's imminent demise year after year after year. (See? If you look hard enough, there's gainful employment for everyone out there, no matter how lame! Truly, it gives one hope.)

In its new report on IT trends for 2003, Giga's ever-lovin' Rob Enderle dishes his latest gloombites on Apple and insists that the company is "being driven out of every segment but consumer." Why, you ask? Because companies are "driving out non-standard hardware" (well, okay, nothing new there) and, he claims, prefer Linux to UNIX on the desktop. Enderle also cites a "lack of management tools"-- gee, it's a pity there's no such thing as Apple Remote Desktop, Workgroup Manager, or a centrally-managed NetBoot technology-- and a "pull back of key vendors like Quark" (hmmm, someone should tell Quark that) as reasons why he expects Apple's market share to drop below two percent next year. (Meanwhile, if you'll allow us a petty grammar flame, apparently on Rob's home planet "obsolesce" is a transitive verb. Go figure.)

But his goofiest assertion of all is that Apple's "continued technical disadvantage" against Intel will force the company to switch from PowerPC chips to x86 processors before 2003 is finished. Suddenly we've veered from Clueless Heights across the town line into Crazyville. While such a switch is always frolicsome fodder for the rumor sites and we've little doubt that Apple is staying prepared just in case Motorola and IBM both fall through the earth's crust and get eaten by the Mole People, to think that Apple would choose to switch processor platforms and require all current software to be rewritten/recompiled to run on new iron (or limp along in emulation) in any situation short of a massive C.H.U.D. incident is just plain nuts.

Our theory? Either Enderle's drinking cheap aftershave when nobody's looking, or he owns stock in a company whose business plan involves collecting license fees on the use of the word "beleaguered." We're not going to bother speculating on which is more likely.

Finally, a research firm with some good news for Apple for once! Gartner Dataquest just issued a press release describing the state of the worldwide server market, and despite a global economy that's begging to be put out of its misery by any semi-humane method within easy reach, total server sales in the third quarter actually grew over three percent from the same period a year ago. On top of that, here in the U.S. the server market actually racked up its third consecutive quarter of positive growth.

"That's all well and good, AtAT," you ask, "but what do server sales have to do with Apple?" Ah, Grasshopper, how deeply ingrained the reflex must be! Try to forget all those years when Mac servers were just regular Macs with some extra software preinstalled; remember, now Apple's got the Xserve making the scene, and it's a server that people might actually buy. Indeed, scratch the "might" part; amazingly enough, in the U.S. Apple was ranked fifth in sales of servers last quarter, which is high enough to get the company listed on an honest-to-goodness chart. Woo-hoo!!

Now, granted, Apple scored its fifth-place ranking by selling a mere 5,700 Xserves in Q3, which translates into a 1.2% market share; to put it into perspective, Sun, in fourth place, sold almost six times that many servers-- and first-place Dell sold over three times as many as that. But considering how long Sun has been in the server game, not to mention the fact that Apple's Q3 sales represented a whopping 273.8% increase over its results from a year ago, we still think there's plenty to smile about. C'mon, 273.8% year-over-year growth? Who wouldn't like those numbers?

By the way, while we're on the subject of servers, never forget: To Serve Man is a cookbook. We just felt it our duty to remind you, in case you were thinking about accompanying any nine-foot-tall, bulgy-headed, goatee-sportin' aliens to their home planet anytime soon.