Andrew Leckey writes for The Chicago Tribune and answers “business” question. For some reason his mess of an answer shows up in the paper’s in the “Technology” section of their web site, even though it’s listed in the Business section. Leckey does the nearly impossible by managing to get almost everything wrong while inserting inane examples in his answer.

Q. I like Apple Computer products and was considering buying its stock. What’s your opinion? – K.C., Orlando

A. Sometimes your best just isn’t good enough. Even a sixfold increase in profits and a 70 percent increase in revenues for the company during its recent quarter weren’t enough to boost its stock price, since Wall Street had expected even better. The firm is also predicting less impressive future results.

The iPod remains the superstar of electronics gadgets, delivering nearly one-third of Apple revenues. More than 5 million iPods were sold in the quarter.

However, more iPods are bargain-priced these days and could be cutting into sales of Apple’s premium products. There is also no evidence that young iPod users will be any more interested in a Macintosh computer than anyone else is.

The world is now wondering whether, facing a flood of competition from other digital music players and cell phones, this innovative company has another hot product up its sleeve. It’s worth noting, for example, that the firm’s G4 Cube sold poorly.

Some analysts have even built the probability of another hit product into their long-term estimates for the company.

Here’s one famous detractor: Microsoft Corp.’s Bill Gates recently told a German audience that “I don’t think the success of the iPod can continue in the long term.” He asserted there might be parallels with the Macintosh computer long ago losing its dominance in the computer industry.

Shares of Apple Computer (AAPL) are up 26 percent this year following last year’s 201 percent gain. Apple split its shares 2-for-1 in February, its first split since 2000.

Apple retail stores are thriving and its core computer business remains strong, with the number of Macs sold in the past quarter up 43 percent. The company recently released the revamped Tiger operating system used in its desktop computers. Meanwhile, it has sold more than 350 million songs worldwide through its iTunes Music Store, which has shown a small profit.

The stock of Apple Computer receives a consensus “buy” from the Wall Street analysts who track it, according to Thomson Financial. That consists of seven “strong buys,” nine “buys” and seven “holds.”

Earnings are expected to increase 254 percent this year compared with 17 percent for the computer hardware industry. Next year’s projected 15 percent increase compares with 19 percent forecast industrywide. Its five-year annualized growth rate of 20 percent exceeds the 15 percent expected for its peers.

One small concern: Apple has not designated a clear heir to co-founder Steve Jobs.

Full article here.

MacDailyNews Take: Apple actually beat Wall Street’s consensus estimates last quarter. Because Apple provided future guidance of 15-percent growth as opposed to 70-percent, the market briefly overreacted. Still, Apple is up 12% this year and 25% in May to date.

There is evidence of Windows PC iPod users are interested in and buying more Macs (iPod Halo Effect). Macintosh sales totaled 1.07 million units, up from 749,000 a year ago. It was the second-straight quarter in which Apple sold more than 1 million Macs. Apple Computer Inc. Chief Financial Officer Peter Oppenheimer said during the company’s most-recent conference call that Apple’s strong sales of Macs during the fiscal second quarter is further evidence that its popular iPod digital music player is translating into increased sales of its computers. In an interview with Dow Jones, Oppenheimer said shipments of Apple’s computers during its second quarter ended in March were the highest in four years.

Why is the G4 Cube, introduced in August 2000 and terminated in July 2001, “worth noting?” It is not “worth noting.” Is Apple not allowed to experiment once and awhile? It has absolutely nothing whatsoever to to with the iPod. Oh, and Bill Gates, is a “detractor” of the iPod? Gee, what a surprise! The iPod is not the Mac, so stop trying to compare them. The Macintosh platform required and still requires huge investments by developers to create compatible software. So, when faced with budgetary contraints, they chose and still sometimes choose to go with the most popular platforms. The iPod simply plays music that can be encoded, for very little cost, in any format the “developers” (musicians and labels) desire: AAC, MP3, WMA, etc. The music doesn’t need to be rewritten, recorded, and remastered. It’s like writing Photoshop once and then pressing a button to translate it for use on Mac, Windows, Linux, etc. Anyone who draws an analogy between Mac OS licensing and the iPod/iTunes symbiotic relationship simply highlights their ignorance of the vast differences between the two business situations.

Apple has sold “more than 350 million songs worldwide through its iTunes Music Store.” Actually, it’s over 400 million, announced on May 10th, to more precise.

Apple’s Mac OS X 10.4 Tiger operating system is used in its desktop computers, of course. Mac OS X Tiger is also used in Apple’s portable iBook and PowerBook computers and in the company’s Xserve servers, too.

And, yes, Apple has not designated a clear heir to 50-year-old co-founder Steve Jobs. Even Leckey can get one thing right, it seems.

Related MacDailyNews articles:
Apple CEO Steve Jobs on Yahoo music, iPod, cellphones, ‘Halo Effect,’ viruses and more – May 23, 2005
Apple debuts iTunes Music Store in Denmark, Norway, Sweden, Switzerland; over 400,000,000 songs sold – May 10, 2005
Apple’s great quarter not good enough for some analysts and investors – April 14, 2005
‘iPod Halo Effect’ on Mac sales seen in Apple’s soaring second-quarter results – April 13, 2005
Apple beats The Street; posts net profit of $290 million on $3.24 billion revenue – April 13, 2005
Morgan Stanley: Apple’s ‘iPod Halo Effect’ is ‘roughly double what the market expects’ – March 18, 2005
‘iPod Halo Effect’ – sales of the iPod are spurring orders of other Apple products – February 24, 2005
Apple execs now see ‘iPod Halo Effect’ clearly paying off with higher Macintosh sales – January 13, 2005
Signs point to Apple adding to their 30 million Mac users via ‘iPod Halo Effect’ – October 26, 2004
The iPod is not the Mac, so stop trying to compare them – August 13, 2004
Apple’s ‘iPod Halo Effect’ materializes, restarting growth in core Mac units – July 15, 2004
What happens when Steve Jobs dies? – August 20, 2003