Consider the situation: A company earns record profits, exceeding analyst estimates in most respects. Despite the skepticism, and dire predictions from over the years, just about everything the company touches turns to gold.

At the same time, journalists don’t want to make it seem that they are fawning over the company, and they no doubt want to provide at least a semblance of fair and balanced coverage. So they’ll call a few industry analysts from a list of folks covering the business, in search of some pithy quotes.

Yes, that’s the way to cover both sides of the story, but when it comes to Apple Inc., you just know that the company has a powerful spin machine that will be working at full tilt regardless of the actual facts. It doesn’t matter if it’s a profit or a loss, whether a product is a success, a failure, or somewhere in the middle, it’s easy to go away with the impression that the company plans to change the world and is doing just that.

But let’s look and see if there’s anything about the numbers that doesn’t seem so impressive. After all, Apple’s stock took a dip after the quarterly report was released, so clearly something was wrong, although it may well be their conservative guidance for the current quarter. But Apple has always been careful about such matters, and they come off looking like huge winners when the figures end up being a whole lot higher.

Well, I suppose the sales of new Macs might be a matter of a little concern. After all, with 50% of new Macs being sold to people who are new to the platform, shouldn’t the sales have risen more than they actually did? If that estimate of Mac switchers is correct, it means that a lot of existing Mac users may still be on the sidelines and not buying new computers. And, even though their market share in the U.S. went up somewhat, at least according to one estimate, it was down overseas.

Is there something wrong here?

A good question, and I don’t pretend to have solid answers, but you have to wonder why some of you aren’t buying new Macs in sufficiently high quantities. Well, it is true that Apple sells more computers during the September quarter, because of educational purchases. This time, it was the Christmas holidays, and PC sales in the U.S. weren’t all that terrific anyway, but Apple managed to sell Mac at pretty much the same clip as in the previous quarter.

It is true, of course, that the fall upgrades to Mac hardware were fairly tame. Sure, Apple switched many of their models to the new Intel Core 2 Duo processors, which offer a modest speed boost, but nothing you’re likely to notice all that much without a stop watch.

The Mac Pro came out in August, and it’s a speedy beast. But didn’t Intel come out with quad-core versions of its Xeon processor, so why didn’t they turn up in the Mac Pro? Apple didn’t even have to do anything more than issue a press release or quietly offer quad-core processors as a build-to-order option.

So were professional users sitting on their hands, waiting for double the processor power, or is a certain powerhouse application from Adobe making them hold off their purchase of new Mac hardware? Well, that’ll change by spring.
What about Leopard? Does the idea of a brand new operating system make you want to hold off buying a new Mac until they come installed with Mac OS 10.5 preloaded. After all, why pay an extra $129 — or whatever Leopard will cost — when you can get it free? Besides, perhaps Apple will upgrade Macs even more in the coming months, with faster processors, new form factors, the whole nine yards.

Of course, all of this is speculation. Perhaps informed speculation, since these scenarios are very plausible.

On the other hand, I do not think that some people are postponing new Mac purchases because of that stock options affair. Besides, if anything were to happen that would hurt Apple, I expect it’ll be telegraphed in advance to some degree, particularly if Steve Jobs were targeted further by government investigators and prosecutors.

But despite some wayward speculation from a few tech pundits, I don’t see that much of a chance of it happening. Although Steve Jobs is one of the most powerful executives in the tech industry — and the entertainment industry for that matter — there’s not really a huge incentive to bring him down.

So is there something potentially upsetting in Apple’s record-breaking financials? I’m sure there are plenty of naysayers out there who will try to find the dark cloth behind the silver lining, but I just don’t see it happening.

But I’ve been wrong before too.

This article was posted on Friday, January 19th, 2007 at 1:50 AM and is filed under News and tagged with: Analyst Estimates, Full Tilt, Good Question, Industry Analysts, Mac Users, Macs, Market Share, New Computers, Quarterly Report, Record Profits, Skepticism, Switchers.