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ATPM 14.02
February 2008





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by Robert Paul Leitao,

Welcome to the February issue of About This Particular Macintosh! This month has a leap year extra day. The leap year is an interesting thing. It was first adopted in the Julian calendar to reconcile the earth’s not-quite 365-day orbit of the sun with the seasons. Without it our 12-month calendar would drift along in time, and eventually we’d be celebrating seasonal things at not so seasonal times.

That brings us to Aloysius Lilius, a 16th century man of learning (astronomy among his disciplines) who determined that the Julian adjustments were a not-quite solution to the calendaring of the earth’s not-quite 365-day orbit of the sun. Dr. Lilius has a lunar crater named after him. I suppose it’s consolation for the calendar changes he advocated being named after Gregory XIII, who incorporated the astronomer’s adjustments into Christendom’s day counting for what is now called the Gregorian calendar. Dr. Lilius removed a number of leap years from each millennium. It may seem like a subtle change, but over time it makes a difference.

The editors of ATPM don’t expect to have a lunar crater named after us, but we do pay close attention to happenings in the not quite perfect computing world. This month we’ll delve into some of the lunacy that took hold in January, as Apple appeared to change its own product orbit. Please read each of our issues carefully. Often times what we say on our pages may seem subtle, but our work will make a difference in your personal computing experience.

The Case of Missing iPhones

At the center of the Mac enthusiast orbit is each January’s Macworld Conference and Expo. It’s a gathering place for developers, peripheral vendors, industry executives, and enthralled Mac users who make a pilgrimage of the annual event.

During the keynote address, Apple’s CEO Steve Jobs announced that four million iPhones had been sold since the product was first released in the United States on June 29, 2007. Four million iPhones are significantly more phones than the number of iPhones that have been activated by Apple’s authorized iPhone service partners. For at least a few moments, the Apple orbit seemed to gyrate around these numbers. Absent service partners in much of the world, using iPhones on non-Apple authorized services has become the rage. While thousands of “missing” iPhones are no doubt in inventory, hundreds of thousands of these phones are in the happy hands of users in many different places around the world.

The Case of the Missing Earnings

On January 22nd, Apple announced that net profits jumped 57% compared to the year-earlier December quarter. iPod revenue leaped 17% on a 5% growth in unit sales. Apple shipped 2.319 million Macs during the Christmas quarter, 2.315 million iPhones, and revenue leaped to an astounding $9.6 billion dollars. Cash flow added $2.7 billion to the company’s bulging cash coffers. For the quarter Apple announced earnings of $1.78 per share.

But it became the case of the “missing earnings.” At the bottom of the press release announcing the astronomical growth in revenue and profits, Apple’s forward guidance for the March quarter brought things decidedly back to earth. Apple announced guidance for the March quarter to be revenue of $6.8 billion and net income of $0.84 per share.

This news sent Wall Street analysts into their own wobbly orbit. Apple’s public guidance was below their expectations. Apple’s share price moved south and ended January trading at $135.36 per share. The shares opened January trading at $199.08.

It’s taken a little while, but a few observers of Apple’s results realized the iPhone’s revenue and earnings are missing from both the December quarter’s results and the March quarter’s guidance. Apple is recognizing the iPhone’s revenue and manufacturing costs over 24 months from each iPhone’s sale. That means the net profits from each iPhone sold will be recognized over two years, and only a fraction of that net profit will be reported in the quarter in which it was sold. However, non-manufacturing costs for the iPhone division will be fully recognized in the quarter they are incurred.

This means more costs relative to reported revenue now and more profit relative to reported revenue later. Just to note it was a full moon the day Apple announced its earnings and guidance. There are no missing earnings. The earnings will be found and reported on a quarterly schedule that includes many moons for now.

Defying Gravity

The MacBook Air is so small you’d think it might hover in place. It’s the smallest and lightest Macintosh ever made. It’s designed for the Internet age and lightweight travel. Absent an enclosed media drive and an easily user-accessible battery, and despite its small size, it sets a new standard for laptop functionality with a multi-touch trackpad. While it might also lighten the pockets of buyers at its introductory price, we expect the new touchpad to find its way into other Macintosh product lines. In other words, we expect multi-touch functionality to create a product orbit of its own.

Our February issue includes:

Bloggable: Just Indulge Me

After weighing in on his own hits and misses for 2007, Wes Meltzer samples the blogosphere for thoughts about the new MacBook Air, then wraps up with a few additional observations on other topics.

MacMuser: One Click of My Finger

Mark Tennent weighs in about the Macworld keynote from the U.K.’s point of view.

MacMuser: Transports of the Night

Leopard broke CyTV, and Mark Tennent is anxious for an update.

Apple Talk: Trade Show

When it comes to punditry about Apple, Angus Wong demonstrates how to sound like we have a clue when we really don’t.

About This Particular Outliner: A Progress Report

Ted Goranson sticks his head up from the foxhole and gives a progress report, some observations on Macworld Expo, and an opinion on outliner business models.

Photoshop for the Curious: Mask-erades

Want to make cutouts of objects in a photograph? Don’t risk erasing part of your image and losing it. Use a mask, instead.

Segments: Macworld 2008 Keynote Impressions

Though he didn’t attend in person, Christopher Turner offers his impressions of Steve Jobs’s keynote address to open the 2008 Macworld Expo, which took place in San Francisco last month.

Desktop Pictures: Manado, Indonesia

Reader Kim Lee provides this month’s desktop pictures taken at resorts in Bunaken National Park in Manado, Indonesia.

Review: Chameleon 5.0.881M Legacy

Great Photoshop plug-in for combining images painlessly, at a price, literally.

Review: Flip Words 2

This is a great combination of Boggle and Hangman, if you stick to the Classic version.

Review: Kinetik 15.4 Backpack

Not too pricey, not too big, and not too small, the Kinetik gets the Goldilocks Seal of Approval for being Just Right.

Review: MacPinball 2.6

Ed Eubanks Jr. finds MacPinball to be a respectable implementation for computerized pinball games, but no accolades for overall experience.

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