We've gotten a lot of viewer mail from Apple-watchers who were more than a little disappointed to hear that Apple's about-to-be-posted $45 million Q1 profit was partly the result of a slush fund set up in the previous quarter. "Beware of False Profits," they'd say (at least the cleverer ones would)-- and we at AtAT agree. "Profits" like the $12 million joke that Amelio pulled in order to get his bonus do nothing but hurt Apple; but we still think that the imminent Q1 profit resulted from far less financial legerdemain, and is much more indicative of a healthier Apple than some would believe. Apple Recon's got some early info that may show this to be true; apparently their sources are already hinting that the Holy Grail of a Q2 profit is fairly likely.

If that turns out to be true, then few will doubt that Apple has truly turned the corner. Q2 pretty much always sucks for Apple, so if they can post even a small profit in such an historically rotten quarter, Wall Street should react pretty darn favorably. And if the stock price goes up to a reasonable level (AAPL is still terribly undervalued), then the possibility of a takeover is greatly reduced. AtAT's drawing a line in the sand; we say that the results posted for the second quarter will be the turning point for Apple. Anything from a small loss to a tidy profit could mark the end of a dark period in the company's history.

Recon posts their typical cautious disclaimers, saying that a lot could happen between now and the end of March, but we find it a good sign that anyone is even hinting at the possibility of a Q2 profit. And after all's said and done, we're optimistic: with the CEO search basically on hiatus, Steve's in the driver's seat for probably at least another quarter. Given how much got done last quarter, we think this Q2 profit thing is a distinct possibility. We're keeping our finger crossed.

Thanks to Larry "Blabbermouth" Ellison, without whom our writers would probably starve, the Apple NC project has been confirmed yet again. The project's complete invisibility during the just-ended MacWorld Expo led some to believe that the whole thing had been scrapped, but on Friday our good friend Larry assured us all that the Apple-branded, low-cost, Mac OS-based network computers will indeed appear later this year. Cnet has the details of his most recent loose-lips episode at the Consumer Electronic Show.

The current plan, according to Larry, is that the first Apple NC's will indeed run the Mac OS and will, in fact, be targeted at the education and home markets (so they have not been retargeted at the business realm, as Mac the Knife had hinted). And in a widely-reported break from the "pure" NC concept, the NC's will come with an optional hard disk. There's no real news there, but it's nice to get a confirmation that the project is still alive.

It's also interesting to hear that Larry's been warned about his gift for gab in the past: "I could get myself in trouble for saying this... if I say any more, I'll get more email from my best friend." C'mon, Larry, what's life without a little danger? Granted, a tongue-lashing from Steve Jobs has been documented as potentially fatal, but where's the fun in keeping mum?

The rumors have been confirmed (or at least as "confirmed" as anything you read in MacWeek)-- Apple's new high-end Macs, code-named PowerExpress, are dead in the water. MacWeek reports that Apple pulled the plug on the beefy six-slot powerhouses because the existing G3 systems are handling the needs of the high-end users pretty darn well-- or, rather, they will, with some new options that Apple's making available.

The PowerExpress was custom-designed for digital video producers, but Apple thinks that a revised Power Mac G3 (with a 300 MHz processor, 1MB of backside cache, tons of RAM, and Wide Ultra SCSI) will fill those needs quite nicely. In fact, the only other serious advantage the PowerExpress had over the current Gossamer-motherboard-based G3's was the presence of six PCI slots, instead of the G3's three. And, as it turns out, Apple realized that most people that buy six-slot machines are doing so because they need the fastest processor-- not because they need the six slots. (That's certainly true in AtAT's case; we bought our PowerTower Pro for the 200 MHz 604e and the 1MB of L2 cache, but the only PCI slot we're using right now is for the video card.)

But what about the folks who really need a six-slot system? Well, first of all, Apple's new "personality card" architecture may allow the addition of some of the features that people would add via PCI cards. Secondly, Apple's moving some commonly-added-via-PCI features to the motherboard, such as Wide Ultra SCSI. And thirdly, there's always the option of buying a UMAX six-slot clone and popping in a G3 upgrade card, for those who just gotta have them slots. So is Apple leaving that segment of the user population out in the cold? To a certain extent, yes, but it certainly seems logical not to build a six-slot system if they're not going to make any money off of it.