TV-PGNovember 2, 2004: Apple's stock rises yet again on talk of strong iPod demand this holiday season-- even as sales data reveal that Apple lost portable music player market share in September. Meanwhile, we've got the final word (sort of) on whether "Opener" is actually a worm or not...
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And The Winner Is: The iPod (11/2/04)
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Ladies and gentlemen, in this year's performance of the U.S. presidential election, the role of "Florida" was played by Ohio. Ha! Just kidding, folks; at the very least, this time we didn't have to listen to interminable debates about butterfly ballots and ambiguous votes (who the heck is Chad, and how'd he wind up pregnant?), and as we fully expected everything settled down in less than a day, and without the Supreme Court needing to decide who gets to put his hand on a book when January rolls around. Compared to the last election, this one was over in a jiffy. Then again, compared to the last election, the Peloponnesian War was over in a jiffy, too.

What does any of this have to do with Apple, you ask? Well, for one thing, let's not forget that Steve Jobs offered to help Kerry with his advertising, so the outcome of this election may well offer some insight into the effectiveness of Steve's Reality Distortion Field in non-tech applications. Oh, and as faithful viewer Eddie H. points out, if history is any indication, now that Kerry has lost, there's also a good chance he'll wind up on Apple's board of directors.

Of course, the most immediate and visible potential consequence of the election on Apple might be its effect on the stock market, which, if memory serves, got pretty skittish in November of 2000. But good news: AAPL was up in after-hours and pre-market trading-- by a buck or so, to boot, so apparently all the voting uncertainty didn't derail the stock's recent and continuing climb up the north face of Mt. Nifty. In fact, with the stock now trading at over $55 a share, Bloomberg News is barely exaggerating at all when it says that AAPL is "erasing the slump triggered in September 2000 by a disappointing profit forecast." (For those of you who have suppressed the painful memory, Apple's stock price had been hovering around $60 before it plunged to about $20 overnight-- but it's feeling much better now.)

So is it the election outcome itself that's giving AAPL a boost? Not likely, unless investors think that Kerry and Gore can work some sort of Wonder Twins superpowers if they both wind up on Apple's board, unlocking shareholder value with the "shape of... an eagle" and the "form of... a tidal wave." No, this time the increase appears to be prompted by Merrill Lynch analyst Steven Milunovich, who's still yapping about iPods. This time, though, instead of making iffy predictions of a flash-based iPod, he's taking a stab at guessing how many iPods Apple will sell by the end of the year. He figures Apple's looking at moving about 2.68 million for the quarter, and evidently Wall Street approves.

Personally, we think that might even be a little low; sure, it's almost four times as many as Apple sold last holiday season, but Apple sold 2 million just last quarter, and somehow we think that the iPod Photo, the iPod U2 Special Edition, the spread of the iTunes Music Store further throughout Europe, and a little thing called Christmas will all juice sales by more than the piddly 34% increase Milunovich is predicting. After all, iPod sales increased by 134% between the last two quarters, and that was without a major gift-giving holiday to spice things up. (And no, "Don't Step on a Bee Day" doesn't count.)

So relax; we knew all along that no matter which of the two candidates got to run this country into the ground over the course of the next four years, Apple was going to do just fine. And if we really want to avoid all this mess in the future, what say we just get an iPod on the ballot in 2008? Its running mate can be an iSight or something. Or maybe Phil Schiller.

 
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Slightly Less Way In First (11/2/04)
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Wait a minute, this just in-- it's TIME TO PANIC!! So go nuts! If you're a traditionalist, scream your head off, rend your clothes from your body, take to the streets in tatters and charge blindly into traffic while sobbing uncontrollably. If you're the type that likes to get a little more creative when all hell breaks loose, feel free to express your breathless hysteria with a jar of pickles and a big box of Styrofoam packing peanuts. Whatever. But the time to freak out is officially upon us.

What's that? Slightly less than half of you were already doing all that because of the election results? Oh. Well, carry on, then. But the rest of you had better get caught up with the whole Stampede o' Terror routine, because as it turns out, the iPod isn't bulletproof after all.

(Metaphorically speaking, that is. We have no idea if an iPod could stop an actual bullet and we hope that nobody's sick enough to find out. That brainless mook shooting up an iMac is about all the intentional violence against Jonathan Ive's designs we think we can stomach in a lifetime.)

Here's what we're on about: even as Apple's stock price rises on strong iPod demand heading into the holiday shopping season, The Mac Observer reports that Apple's share of the portable music player market actually fell during the month of September. As in, it went down. Impossible, you say? And yet it happened: Apple had 65.8 percent of the market in August, but only held onto 58.6 percent in September. And if you look at sales of just hard drive-based players, Apple's share slid from 92.0 percent to 87.3 percent. That means that not only are more people deciding to buy flash-based players, but also that a higher ratio of people who are sticking with hard drive-based units are now opting for non-Apple products. Scream like you mean it.

There is a silverish lining, however, which is that of the 4.7 percentage points Apple lost in the hard drive player market, 3.6 of them went straight over to Hewlett-Packard and the Apple iPod + hp. In other words, the iPod still holds over 90 percent of that market, although Apple shares it with HP now. (The better news is that HP's 3.6 percent market share actually lands it in second place; Rio's in third with 2.8 percent, Creative took fourth with 2.6 percent, and iRiver grabbed fifth with 1.5 percent. And Dell and Sony are splitting a pizza in Nowheresville.)

But the panic is still justified, because according to analyst Steven Baker, "the September numbers were highly affected by the release of the fourth-generation iPod"-- and if Apple's sales were boosted by a product refresh and the company still lost market share, that points to trouble ahead. Indeed, according to Baker, "while the iPod is doing extremely well, expanding that market any more is extremely tough. It's about as high as you can go." In other words, the iPod's market share might one day drop to-- dare we utter the unspeakable?-- 55 percent. Maybe even 50. Aiiiieeeeeeeeee!!

So maybe the previously-quoted estimate of 2.68 million iPods to be sold during the holiday quarter isn't insanely conservative after all. Here's hoping that demand doesn't peter out just when Apple needs the momentum to carry itself forward; we're mildly relieved to remember that Apple says it exited September with all iPod models on backorder (so from a numbers perspective, it didn't sell as many as people wanted to buy), but that doesn't mean Apple's market share won't drop to a mere seven, six, or even a piddling five times that of its nearest competitor. Our memory gets foggy when we hyperventilate-- which presidential candidate supports Mandatory iPod Purchase legislation again?

 
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The Final Closer On Opener (11/2/04)
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Enough with trivial issues like who's going to be president of the United States. Ready to plunge back into the real controversy that's currently tearing the Mac community apart? We speak, of course, of the burning question on everyone's lips: is that "Opener" malware a virus or not? Because after some neck-wrenching back-and-forth, here's how things stand: Apple says that Opener is "not a virus, Trojan horse, or worm," while some independent antivirus companies say that it is a worm because it "does try to copy itself" to other hard drives, including network-mounted volumes. So who's right? Maybe we'll need a series of three nationally televised debates in various formats to find out. (If so, at least we'll know that the rectangular bulge on Steve Jobs's back is an iPod.)

Personally, we've already come to our own conclusions, thanks to faithful viewer Harold Martin, the developer who just happens to be the author of the Opener-removing "Closer" script. Harold obviously has an up-close-and-personal relationship with Opener's code, and according to him, "Opener copies itself to all mounted volumes with a /System folder. So if you have a system on an external HD and have your other Mac's HD mounted via network file sharing and so on, it will 'propagate.'" Which is precisely what the antivirus companies have said, in their charmingly alarmist "buy our antivirus software or suffer a horrible flesh-eating demise like those dumb kids in Cabin Fever" fashion.

Whether or not Opener therefore qualifies as a "worm," however, is perhaps a matter of interpretation; if one of our PowerBooks were infected, for example, our Power Mac wouldn't get Openerized too, because while we do keep it connected over AirPort with full access privileges, it just so happens that we only mount a user directory, not the whole hard disk... and we certainly never mount any full volumes over the Internet or anything like that, and we doubt 99.5% of Mac users do either. In other words, there's barely any resemblance between Opener's only method of spreading and the way most Windows worms loot, pillage, and burn any PCs within a fifty-mile radius. So both sides are right, in a way; technically, sure, Opener can spread from one Mac to another in a very specific set of circumstances, but in its current state, its possibility of spreading with any reasonable degree of success is basically nil-- it's a worm, but it's not really a "worm."

So for the time being, at least, when folks like London's mi2g Intelligence Unit say that Mac OS X is "the world's safest and most secure 24/7 online computing environment" (thanks to faithful viewer Alexander Liz for the heads up), they're probably still 100 percent correct-- but that doesn't mean you don't have to take reasonable precautions. If you want to get really serious about it, faithful viewer One Guy From Finland informs us that no less spooky a government agency than the National Security Agency has issued a 109-page document detailing how best to lock down Mac OS X against unauthorized access. Share and enjoy, and keep watching the skies.

 
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