Apple Is Not AAPL

The recent iPhone discussion here has made it clear that it’s possible to love Apple the company and have doubts about AAPL the stock’s current valuation. I put myself in that camp, as I adore Apple’s products and look forward to switching my office from PCs to Macs on my next upgrade cycle now that the internet has freed me from dependence on Microsoft products. However, I think the stock is getting ahead of Apple’s business prospects, which is why I’m watching the stock for a chance to sell short.

On Tuesday, IT specialist Dale Stamps provided an excellent run-down of the advantages of PCs over Macs, but revealed that he has quite an extensive back-up system using utilities that are available only for PCs. I criticized that with this comment:

“I will never have as sophisticated a hard-drive management and registry cleaning routine as Dale seems to have. I don’t really want to and it ticks me off that I should need to. Why can’t the computer keep itself clean? Evidently it can, if the right software is installed, so why isn’t it? I’ve never heard a Mac user talk about their registry problems.”

Today, Dale is back with this:

Based on my experience with my customer who is a very loyal Mac user, all individuals need to maintain their computer. I am not in his office all that much, but I have been there when his computer freezes, and he has a Mac expert there to locate glitches in his computer operation, and he has had at least one total disk failure that cost him all his data. He never recovered some of it because it was not properly backed up.

Most of my maintenance is done automatically at night while I am sleeping. I do have two small programs that do not have the ability to run automatically; so I spend about 10 minutes a week using them to compact and defragment the registry. Prior to Microsoft Live I had a program called System Mechanic that did everything automatically, but it slowed down startup and reboots considerably. It used Russian anti-virus software that was a real memory hog. Perhaps Microsoft Live will eventually have registry compacting and defragmentation as part of its operation.

Considering the fact that Windows is used extensively on home computers, I believe Microsoft does quite well — except for the period they had ME on the market.

I suppose I have to concede that my publicist’s brother-in-law who works at HP and is the one who rescued my new laptop when HP’s India-based tech support team couldn’t figure out that I had a bad gigabyte of memory, told me in the course of fixing my computer that “Windows XP is one of the most stable operating systems ever released.” Of course, the point of that comment was that I shouldn’t upgrade to Vista because it has too many bugs, but at least I’ll tip my hat to Dale in agreeing that sometimes “Microsoft does quite well.”

Next up: Michael’s Apple Appreciation Show. Before we begin, though, he cites this article from The New York Times. Here’s a key excerpt:

Many analysts have predicted Apple would introduce future versions at lower price points, and a patent filing that was disclosed by the U.S. Patent and Trademark Office last Thursday further fueled the rumor mill.

The patent application, filed in November, describes a multifunctional handheld device with a circular touch pad displaying illuminated symbols that could change depending on the mode in use. Drawings in the filing show an iPod-like device with a scroll wheel resembling a rotary phone dial.

Apple enthusiast Web sites quickly offered up their interpretation: an iPhone Nano.

J.P. Morgan analyst Kevin Chang said in a note to clients that was widely publicized late Monday that the patent could lead to a new iPhone that will cost $300 or less. Unlike the current iPhone, which is controlled by a 3.5-inch widescreen touch screen display, the new model will likely be controlled by a scroll wheel and might have limited functionality, Chang wrote.

“We believe it’s a strong sign that Apple could potentially convert every iPod nano into a nano phone,” he wrote, referring to the company’s popular flash memory-based music player.

Now, Michael’s lengthy ode to Apple:

A key point is that what Apple has in the iPod, iPhone, and its various computer models are products that are a class above the competition and pulling away from them. Witness iTunes and the iPod — Apple’s competitors ignored it in the early stages, never quite recognized what Apple was doing and now, five years later, they trot out second-rate imitations (both in internet music stores and devices) that remain way, way behind the curve set by Apple.

I don’t think the phone carriers will remain as flat-footed regarding the iPhone as Sony, MS, and others did on iTunes and iPod, but Apple has such a head start on them already that I’d still bet on Apple.

Add to this discussion the crystal-ball gazing (from The New York Times article referred above) for the next product cycle for the iPhone and iPod. Sure, these are rumors and speculation, but these are pretty good guesses, in my opinion, if you extrapolate out from what Apple has done in the past with their upgrades on other products (particularly iPod.)

I believe Apple will make its iPhone targets and, with reduced costs and (rumored or speculated) new iPhone models, will exceed those targets. In two years, I will be ready for the next generation iPhone — probably one of the lower end models as I don’t need it to make toast for me, just phone calls, tell the time, and give me the date.

Anyway, I think this squares with your assessment of AAPL stock as an excellent mid- to long-term play. I agree that AAPL is due for a correction (or, rather, I sincerely, desperately hope for a correction as a good entry point, to be honest).

Along the lines of your discussion of changing over from a PC to a Mac, I am a “switcher” as we’re called. Put me down in the “delighted” column. I really wanted to wait until Leopard came out, but after the latest hardware re-fresh in June, I jumped in and got one since I simply couldn’t handle what I term the “computer road rage” anymore. It was a good choice; I won’t mind shelling out $130 in October for Leopard (really looking forward to Spaces feature, by the way.)

The phrase “it just works” is a profound statement that you can only appreciate after having one for awhile.

I find that many Windows ideas are well-intentioned but needlessly complicated and only partially functional. You don’t appreciate this until you work on a Mac and see it done simply and effectively. Cases in point: the Dock, System Preferences, Dashboard Widgets, Expose, user accounts, file structures, and so on.

One item I would note: my “muscle learning” is conditioned by 20 years of working on PCs. I still use overly complicated work steps and find myself failing to take advantage of simpler, more streamlined work procedures that are part of the Mac OS.

Example: I still crawl through Mac’s Dock like I would in on a PC with the Taskbar while failing to use the faster Expose (mentioned below). I notice many similar instances like that. Slowly, I am coming around.

As for getting used to the new system, I found that I could work fairly fluently on a Mac after about three days. All you need is some file organizing project where you work in the simpler, more straight-forward file structu
re using a number of hot-keys for cutting, pasting, renaming, etc. These are basic work skills — the “knowing where you are” in the file structure, and having routine work processes and hot-keys underhand. After a half hour of this, you now speak “Mac” reasonably well.

I would recommend D. Pogue’s book with O’Reilly on the Mac OS, and also Rough Guide’s Macs & OS X. These will accelerate your getting up to speed. Online at AppleLinks, MacRumors, etc. you’ll find excellent “switcher” advice, especially on free utilities and other programs to download; many of these are quite excellent.

In my experience, my old PC programs (including Office 2000) work better on the Mac than they did on the PC! Partly this is due to the fact that I am running Office 2000 on XP without the accumulation of the last three years of XP-clogging updates. Since the Mac handles all my security, I don’t need many of the XP updates.

People have said that Office 2004 for Mac is a better, more feature-rich program than the Office for Windows product. I can’t verify that, but I’ve heard it a number of times and tend to give it credence.

I do look forward to Office 2008 for Mac due to be released later this year. Retail version is expensive ($400), but you can go to an Apple store and get a student/teacher version for $150. The limitation on this version is that you cannot upgrade on the next product cycle. Given that I am using Office 2000 in this year of 2007, a limited student version should last me until 2015 or so. That works out to $20/year. This last figure convinced me that I can forgo other solutions, even the free ones like OpenOffice, etc., and Google Docs ($50/year).

In sum, the “software” issue was a big one for me before I switched. I have found that Apple and many third parties have removed that issue for me entirely. I get all my PC software working fine, oftentimes better, and there is a lot of excellent software available for Macs that is surprisingly well-written.

Check out Dashboard and see how Widgets are meant to be handled. Widgets are nice thoughts in PC-land, however they hog resources and take up screen real-estate (in my experience on a three-year-old HP laptop). On a Mac, they deliver what a computer promised all those decades ago: weather, calculators, translators, dictionaries, wikis, etc.

It’s easy to see why I’m looking forward to becoming a switcher myself.

Tomorrow: Dave Van Knapp on the momentum pushing AAPL stock, and thoughts on Michael Moore’s new film SiCKO.

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