Who's keeping the books? It seems that there was in fact some "creative financial planning" involved in Apple's recently-announced $45 million Q1 profit. According to MacOS Rumors, Apple would have posted a small loss instead of a small profit if not for a special slush fund they had set up last quarter. Basically, Apple artificially inflated last quarter's loss by putting money aside that they could add into the pot for this quarter.

Now, at first, we were pretty dismayed to hear about this; it kind of cheapens the whole profit thing. But Rumors has a point: this shows that Apple's thinking. Given that they were going to post an inevitable and inescapable loss last quarter due to the Power Computing buyout, why not increase that loss to invest in increasing the possibility of a subsequent profit? Apple needed a profit to show Wall Street that it is still a viable company: what looks better, a large loss followed by a small loss, or a larger loss followed by a small profit? Think Clever.

The only thing that really bothers us about this strategy is that it casts serious doubt in our minds about Apple's ability to sustain this profitibility into the current quarter. But with luck, the momentum of the G3's and the CompUSA deal will just keep picking up speed, and maybe Apple can post a 100%-true, no-holds-barred, honest-to-goodness profit next quarter.

So if you're a faithful viewer tuned in from home, you're not the target audience for the sub-$1000 home computer. Why? Because the whole point of the sub-$1K machine is to pull in the other half of the consumer households-- the ones who have not yet purchased a computer. According to analysts, the main reason those folks are staying happily in the Mesozoic era of ball-point pens, newspaper, and pocket calculators (remember all that stuff? Ah, the good old days...) is because computers cost too much. Break the $1000 barrier, analysts say, and they will come. And those analyst appear to be pretty smart people, because about 40% of all retail computer sales are purchases of sub-$1000 machines, according to Newsbytes.

Well, that's all well and good. So where the hell is Apple in all this? Nowhere. Hewlett-Packard and Compaq just announced $799 Wintels. The cheapest Mac, however, is a darn sight more expensive. Which means that of that 40% of all retail computer sales, Apple's share is nil. Zip. Zero.

Suppose Apple's happy about that? Of course not. That's why the Newsbytes article says that Apple is "seriously considering" a sub-$1000 Mac. Apple may finally have caught on to something most of us already knew: you can't abandon the home market without giving up the education market, too-- and Apple would like very much to hold onto the education market until it's pried from their cold, bankrupt fingers by Intel "migration grants." Here's hoping that a cheap Mac appears and begins to kick a little kiester. Six months late, but moving fast...

One of the great joys of living and loving in this Age of Technology is that damn near every fool word you ever "say" via email is etched permanently in stone, metaphorically speaking. That's the sad truth that Lawrence Lessig is learning as Microsoft continues to fight his appointment as Special Master in the "Redmond Justice" case. Despite Lessig's refusal to step down from the position, his emailed quips about "selling his soul" by installing Internet Explorer on his Mac last year may just get him booted. An excellent San Jose Mercury News article has a wealth of information.

Lessig was rightfully angry when the act of installing IE on his Mac appeared to screw up his Netscape bookmarks, so he asked a friend at Netscape via email whether IE was really responsible. Personally, we don't see any particular problem with Lessig's mail, though Eric Bradley's rant puts him squarely out of the Special Master running (though he's a Netscape employee anyway). You can read the actual email messages yourself on Microsoft's "Press Pass" page-- for some reason the three short messages are in the form of a 181KB GIF image, scanned in from a printout. Perhaps Microsoft could spend a little time writing an OCR package? Sheesh.

It must be kind of spooky for Lessig to see personal email he sent a year ago on a public web page being read and judged by thousands of people all over the world. We at AtAT hope you all appreciate the very large sacrifice we are making by bringing you this show-- with everything we've broadcast, we've all but destroyed our chances of ever being a Special Master (or, for that matter, President of the United States). Allow us to wipe away a collective tear.