TV-PGOctober 17, 2000: Fred Anderson prepares for his big performance tomorrow, as Apple warms up the QuickTime Streaming Servers for the live webcast. Meanwhile, Dataquest once again claims that Dell has overtaken Apple in the education market; haven't we heard this before? And Sony introduces a couple of new laptops that may really give the PowerBook's aging design a run for its money...
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All Ears Are On Fred (10/17/00)

Happy Rebound Eve! Or is it the day before Black Wednesday? Everything hinges on what money dude Fred Anderson says when he hosts that conference call with the analysts tomorrow after the market closes. Steve Jobs may ultimately be the Great and Powerful Wizard as far as the magical land of Apple is concerned, but when Fred Anderson talks, people listen-- and buy and sell accordingly. The numbers that Fred is currently carrying around in a locked briefcase handcuffed to his right wrist may well affect Apple's short-term financial health far more than any Stevenote, past or future.

Let's recap this most recent bout of high-finance melodrama, shall we? First, the analysts expected Apple to make roughly $165 million in its fourth quarter. Then Apple, evidently bored with its consistently wonderful stock performance for the past couple of years, decided to comply with federal regulations and post an earnings warning. In that dangerous missive, the company broke the dire news that due to various and sundry apocalyptic factors (such as slacker Mac geeks spending too much time playing The Sims and not enough time ordering Cubes for every room in the house), Apple in fact expected only to make about $110 million or so. The analysts immediately slashed their estimates to fall in line with Apple's fun little surprise, AAPL shed half its value overnight, and suddenly Apple was back to being "beleaguered" on the morning news. For a seething take on this ludicrous situation, we recommend Niko's rant over at MacAddict, partly because he puts things into perspective, but mostly because he's a cool guy and he included a gratuitous plug for our own Beat The Analysts contest (which closes at 10 PM EDT tonight, by the way).

Since then, Apple's stock has actually continued to fall, and right now it's hovering around $22, down from $55 before the earnings warning and $75 in March. We get the distinct feeling that AAPL has been treading water in the $20-$25 range, just waiting to see what happens when the real numbers come out-- and that turning point is now just one day away. If Apple posts a profit exceeding its earnings warning prediction, perhaps its stock price will begin to rebound strongly in after-hours trading. If it misses even its own reduced expectations, the sky will splinter into billions of razor-sharp shards which will fall and wipe out half the world's population in a jagged, screaming orgy of death.

For what it's worth, if you're the type who likes to play with matches, pick fights with armed thugs, and base your financial knowledge on info from rumors sites, AppleInsider has now joined Mac OS Rumors in reporting that Apple will post a profit significantly higher than its overly-pessimistic prediction. For those of you who want to experience the action as it happens, just make sure you're QuickTime-enabled and tune in to Apple's live streaming feed tomorrow at 2 PM Pacific. While we strongly suspect that tomorrow's key phrase will be "not as bad as we thought," we still recommend that you remain indoors-- and wear a helmet just in case.

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The OTHER Brain Drain (10/17/00)

Houston, we have a problem. Everyone knows that Apple's recent earnings warning blamed the fourth-quarter shortfall in part on slowing sales in the education market. And longtime viewers are well aware that while Apple once ruled that market as the undisputed king, its share has been dwindling in dribs and drabs over the course of the last several years. Remember about a year ago, when Dell announced that it had finally eclipsed Apple as the number one manufacturer in education? Sure, the company was wrong, having neglected to count Apple's own direct sales to schools, but even then some of us thought we saw the writing on the wall.

So, back here in the present, we're dismayed but not particularly surprised to see that the Wall Street Journal (via Bloomberg News) is reporting that this time it's for real: in 1999, Dell toppled Apple from the education throne, capturing 15.1% of the market compared to Apple's 12.5%. The king is dead; long live the king. But wait a sec-- there's still hope. These numbers apparently come from the Dataquest Gartner Group, the same entity who produced the incomplete data which led Mike Dell to crow to the press about beating out Apple last year. Could it be that these new numbers are just as flawed as those reported last October? Hey, in the market research game, anything's possible. Unfortunately, Apple's not able to refute those numbers just yet, since the company's ensconced in its "quiet period" until tomorrow's earnings statement.

Of course, whether Apple comes in first or second isn't really the issue anyway, Mike Dell's obsession with All Things Steve notwithstanding. Whether or not Apple is still top of the heap, it's losing altitude as schools "phase out" Macs in favor of new Wintel systems, because the "real world" is so "Windows-oriented." There's a nasty feedback loop that Apple's been fighting for years: businesses use Wintels, so employees buy Wintels for home, so their kids grow up on Wintels, so the schools buy Wintels for the kids to use, so the kids graduate and start businesses that use Wintels. It's like an infinite loop of mediocrity and pain. Apple can attack the consumer market all it wants, but until it finally addresses all markets (including the dreaded Enterprise beast it's worked so hard to ignore), it's going to have an increasingly tough time hanging onto its share of any of them. Here's hoping that Mac OS X proves to be exactly the secret weapon that Apple needs.

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Nipping At Apple's Heels (10/17/00)

Anybody who denies that Apple turned the industry on its ear when it introduced the original iMac needs to stop snorting the Windex. Sure, plenty of pundits at the time scoffed at the idea that a translucent, brightly-colored computer would even draw the public's attention, let alone provoke the rest of the beige-box manufacturers to start incorporating style into the equation. That all changed once the iMac actually shipped, and suddenly all those beige-heads found themselves scrambling to cash in on the translucency phenomenon.

These days, of course, style is an ever-increasing factor in the computer industry-- but hardly anyone seems able to get it right. Either we see blatant rip-offs of Apple's designs, or original work that just hurts the eyes (and not in a Key Lime way). There's one big exception, though: Sony. Now there's a company that knows how to design for form as well as function. So Apple should be pretty nervous about Sony's new line of VAIO laptops, fresh from under the tarp as of yesterday. A Reuters article pointed out by faithful viewer Ken Hall has more details on the two newcomers. One sports a "radically new translucent design" including a "light gray aluminum pipe... connecting into a fold-out handle" which is starting to make the current PowerBook's essentially two-and-a-half-year-old curvy black design seem positively outdated. The other is a scary-looking cyborg-style deal, which melds a laptop with a camcorder. It's Borg-like, to be sure, but it's still excitingly chunky and cool-- at least, as cool as it can be while still running Windows. Come on, admit it: doesn't seventeen hours of battery life, thanks to Transmeta's Crusoe processor, make you drool?

All of which has us wondering whether Apple's rumored PowerBook G4 will still be able to kick as much butt when it finally surfaces at (hopefully) this January's Macworld Expo. Between Sony working its magic on the laptop side, and Handspring's new Visors pushing the envelope in the handheld market (one that Apple created and continues to ignore), it's hard to feel that our favorite innovator isn't slowing down just a little. Here's hoping for some big, Apple-flavored surprises bursting forth from Cupertino-- and soon.

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