High Finance Lesson Time! Know how to get analysts to start upgrading your multibillion-dollar company's stock to "Buy" status? Well, evidently all you have to do is publicly admit that you massively misforecast your inventory needs and you're going to miss two solid months of revenue from one of your major product lines as you shut sales down completely until you can get a replacement product out the door. Boy, we tell ya, some of this corporate finance stuff strikes us as just a little counterintuitive sometimes...

No kidding, though: following yesterday's revelation that iMacs are now effectively nonexistent until third-generation models ship in September, MacNN reports that Smith Barney has upgraded its rating on AAPL to "Buy" and figures that the stock might hit $37 sometime in the next year. Reportedly Smith Barney sees lots to like in the imminent "launch of iPod mini in Europe," the initial sales numbers for Euro iTMS, the advent of the HP-branded iPod, volume shipments of the all-dual Power Macs, the opening of Europe's first Apple retail store in London, and yes, even the new iMac coming in September. Following yesterday's AAPL drop, the firm states that it "would be aggressive buyers" given the new lower price.

And Smith Barney's not the only firm with that sentiment, because Macworld UK quotes analysts at Needham & Co. as saying that "near-term weakness presents an excellent buying opportunity, because the issue is one of supply, not demand." Needham had already rated AAPL a "Buy," but it's gone so far as to reiterate that rating in light of what we had figured sounded like pretty bad news. Apparently those analyst folks disagree, and if "Buy" ratings help Apple's stock regain some of the value it lost when news of the iMac snafu went public, then hey, we don't need to understand it. We just want the free money.

This all leads us to wonder what other seemingly bad news Apple could leak that might prompt even more analysts to climb onboard the "Buy" train. We're thinking that something along the lines of yet another miniPod delay would make a few analysts' eyes light up, while news of a catastrophic 90-nanometer G5 recall could bring virtually all of the firms into "Buy" territory. And a revelation that Steve Jobs has come down with terminal boneitis could lead to "Strong Buy" across the board. Who knew that bad news could be so lucrative in the long haul?

Okay, so it's been tough, but you've finally managed to stop yourself from taking Dell up on its kind offer to crush your iPod into a thin paste in exchange for $100 off one of its own stellar music players. Good for you. Only now you're finding yourself tempted by those new players that Sony introduced yesterday-- in particular the NW-HD1 Network Walkman. As faithful viewer Mike Scherer pointed out, MacMinute reports that the NW-HD1 (catchy name) has a 20 GB hard drive, but weighs only 4 ounces-- almost thirty percent less than a 20 GB iPod, and only about half an ounce more than a miniPod with a mere 4 GB storage capacity. Trust us, size does matter, as through-the-roof miniPod sales will attest; Dell's player is a clunky slab by comparison, and when we had the misfortune to encounter a 40 GB Nomad Zen last weekend, we mistook the thing for a brick wrapped in tin foil.

Oh, but the temptation doesn't stop at size; whereas the iPod claims 8 hours of use per battery charge, the NW-HD1 boasts 30. What's more, since a 20 GB iPod goes for $399 and Sony's minuscule new player will sell for "less than $400", pricing will likely be a dead heat. So let's recap, here; for the same price as an iPod, Sony offers a smaller and lighter player with gallons more juice per charge, the same size hard disk, and-- did we mention this?-- the ability to store 8,000 more songs. Really! See? Apple claims its 20 GB iPod will put 5,000 songs in your pocket, while Sony's press release insists that the NW-HD1 will hold "up to 13,000 four-minute songs." No wonder you're feeling tempted.

Well, it's cold shower time, kiddies. First of all, any sort of song capacity comparison is a joke, since a 20 GB hard drive is a 20 GB hard drive. Sony's drives aren't enchanted by a dusting of magical pixie dust before leaving the factory or anything. (At least, if they are, you'd expect Sony to play that up as a differentiating factor.) The difference in numbers here is that Apple bases its song count on 128 Kbps AAC files, while Sony's tally assumes "songs recorded at 48 kilobits per second." Yes, 48 Kbps. Considering how many people whine that even 128 Kbps AAC files don't sound good enough, we're going to go out on a limb and assume that 48 Kbps songs in any format are probably going to sound like a portable handheld AM radio playing from the bottom of a well while a few dozen people pop bubble wrap nearby.

And here's the real deal-breaker: about that format? Turns out that Sony's decided to go with its proprietary ATRAC3 format... and nothing else. While Apple pushes AAC pretty heavily (it's the only thing it sells at the iTunes Music Store), at least the iPod can also play AIFF files, WAVs, the new Apple Lossless format, and probably most importantly of all, good ol' MP3s. If you get an NW-HD1, though, you'll have to transcode your entire music library into ATRAC3 before you can carry it around with you, and believe us when we tell you that you're not going to want to do that.

See, aside from the time you'd have to invest, there's the little matter of the fact that, quality-wise, the ATRAC3 format apparently sucks eggs whole through a Crazy Straw. For evidence, we point you towards the results of Roberto Amorim's latest public listening test, conducted just a couple of months ago. The test had dozens of listeners rate the same pieces of music encoded into several digital music formats at or around 128 kbps, and when the results were tabulated, ATRAC3 at 132 kbps came out dead last, having "surprised by its bad performance." So if listeners judge 132 kbps ATRAC3 (incidentally, the format and bitrate of songs sold by Sony's Connect downloadable music store) to sound so much worse than 128 kbps AAC, what do you suppose 48 kbps ATRAC must sound like? (Three hints: radio; well; bubble wrap.)

So while Sony's new player may indeed be, as MacMinute calls it, "the closest thing to a threat that Apple's iPod has encountered," the good news is that "close" is entirely a relative term. Once shoppers hear that they'd be tethered to the ATRAC3 format exclusively, we figure that sales of Sony's players will be "close" to those of the iPod in much the same sense that Earth is "close" to the sun; that doesn't mean you're going to want to walk 93 million miles to the corner store to buy some Big League Chew.

Toss in the little fact that we sincerely doubt that the ATRAC3 transcoding software will be Mac-compatible (gee, maybe we should have mentioned that first, hmmm?) and we think you should do some long, hard thinking before ditching your 'Pod for a Network Walkman. Well, okay, that 40 GB model with the color screen looks pretty swanky, and it even has the courtesy to remind you that "Music is fun!" But ATRAC3, people, ATRAC3!

We know you're expecting the traditional installment of Wildly Off-Topic Microsoft-Bashing Day, but do we really need to bother? It seems that the federal government's taking care of that whole angle for us this week; as faithful viewer JD MacMan points out, the EE Times reports that the Department of Homeland Security has officially recommended that everyone try "using browsers other than Microsoft Corp.'s Internet Explorer" for "security reasons." Huh? How can this be? As we all know from the incisive reporting of TechWorld, "Windows is more secure than you think," and since IE is an inextricable aspect of the whole Windows experience, it, too, must be practically bulletproof.

Or is Microsoft no longer claiming that IE is an inseparable part of its operating system now that the "Redmond Justice" tussle is all but over? After all, it was always a ludicrous argument easily disproved ("Exhibit A: Internet Explorer for Macintosh"), and now that Microsoft no longer needs it as a defense against illegally tying one product to another, we imagine the company's happy to see it go.

Indeed, Microsoft's legal team has lots to cheer about lately; as faithful viewer Philip Regan informed us, the very last state holding out for actual remedies in the "Redmond Justice" settlement (instead of the ineffectual wrist-slapping that everyone else has been too tired not to approve) has finally thrown in the towel-- or, rather, had the towel thrown in for it. MacCentral reports that the U.S. Court of Appeals for the District of Columbia has "rejected an effort by the state of Massachusetts... to overturn the antitrust settlement between the U.S. Department of Justice and Microsoft." Chief Justice Ginsburg insists that the settlement as it stands does just fine at "remedying the anticompetitive act of commingling... without intruding itself into the design and engineering of the Windows operating system... Well done!"

"Well done"? What is this, an appeals court ruling or Romper Room? For what it's worth, defeated Massachusetts Attorney General Tom Reilly reflected that the country's tech economy "will not reach its full potential unless regulators and the courts are willing to deal with Microsoft and its predatory practices... This was a fight worth fighting." Go get 'em, Tom.

Meanwhile, if you had high hopes that maybe Europe would fare better in its attempt to rein in the Redmond Monster, you might want to take 'em down just a smidge: Reuters reports that the European Commission "has temporarily suspended an order requiring Microsoft to sell a version of its Windows operating system without a media player software." "Temporarily." Right. Microsoft's made of freakin' Teflon or something, so you'll forgive us if we suspect that the eventual outcome of this whole thing won't change anything any more than every other antitrust action against the company that's come before it. Ah, the cynicism of experience...

What with $53 billion in the bank and a chokehold on several tech markets worldwide, Microsoft may well have arrived at a point where the only thing left that has any potential to change it is a volley of surgical nuclear strikes. Where are those weapons of mass destruction when you need them?