So the Wall Street Journal and a few blogs reported that Apple Inc. (NASDAQ: AAPL) said Tuesday it has filed a suit against Psystar Corp., a Florida-based company that makes and sells computers that run Leopard, Apple's Macintosh operating system software. The suit was filed July 3.

Apple seems to think that Psystar is infringing its copyrighted computers as Psystar's $600 Open Computer "violates an Apple policy that forbids people from installing Apple's Macintosh software on anything other than an Apple-labeled device."

But according to AppleInsider, "A representative for the company, identified only as Robert [argues] that the Mac OS X end-user license agreement, which prohibits third-party installations of Mac OS X on non-Apple hardware, stands in violation of antitrust laws." Rodolfo Pedraza, Psystar co-founder said in the past to the Journal that his company pays for every copy of the software it sells.

I understand what Apple is so worried about. If anyone remembers the IBM Clones of the 80s, they also remember that very quickly IBM has lost the leadership role in the market for IBM PC compatibles by 1990. It wasn't the end for International Business Machines Corp. (NYSE: IBM) as it derived a considerable income stream from license fees. But Macs are not just hardware, they're software too, and we all know what operating system has dominated those PCs. Microsoft Corporation (NASDAQ: MSFT) Windows has become the global leader.

So other than the fact that Apple has different rules on what can run on its computers, iPods and iPhones, including the strict iTunes/iPod relationship, seem strenuous to the extreme and definitely borderline violating some consumer protection laws, it's also possible Apple may be missing on a great opportunity here. The Journal mentions that No. 2 computer maker Dell Inc. (NASDAQ: DELL) is interested in making such Apple OS capable computers, meaning Apple see sales increase ten fold and capitalize on licensing fees as well as software sales.

Then again, knowing Jobs' strict attention to details, his Alpha personality and controlling nature, I'd say that's likely never to happen.

A company called Psystar has announced that it is selling a $400 computer that can run Apple's Leopard operating system. Psystar is referring to the machine as the Open Computer (a change from the original name, Open Mac) and claiming that it is "The Smart Alternative to an Apple."

I doubt that Apple is very happy with this development, and I suspect that Psystar probably has a few messages from Apple's lawyers on its answering machine. As Wired's blog points out, Apple's end user agreement states that its software can be used only on Apple hardware. Apple has a long and rocky history with clone hardware producers, and has aggressively sought to maintain its monopoly on both its excellent software and the sleek machines it builds to run it.

And that's a shame, because a lot of people would like to buy a Mac but are put off by the price. The most basic Mac Mini is 50% more than the Open Computer, despite being slower and having less memory. Of course, I can't say for sure that the Open Computer works as well as a real Mac. But I hope that Apple will get the message that there is demand for cheaper computers that can run its software. It needs to either produce its own cheaper machines -- such as the eMac I'm using to type this post but that is no longer available -- or allow clone manufacturers to produce on their own. In the long run, it can only help Apple increase its market share.

Back on May 23, 2007, I blogged that Apple (NASDAQ: AAPL) would become bigger than IBM (NYSE: IBM) within two years' time. In May, IBM sported a market capitalization of $158 billion and Apple was just getting ready to hit $100 billion in market value. Well, IBM has since reported its December quarter Monday, and it was excellent. IBM shares responded with a $5.53 move to the upside, leading the market out of the doldrums -- at least temporarily.

The big news, however, is that Apple, which has yet to report its December 2007 quarter (scheduled for January 22) is now bigger than IBM. Apple's market cap is now at $156 billion and IBM's is at $142 billion. It did not take Apple the two years to pass IBM as I had written. I kind of knew it back then, but did not want to be aggressive with my forecast.

I will be a bit more aggressive now and predict that Apple will surpass Cisco Systems (NASDAQ: CSCO) in the next few months, if not the next few weeks! Cisco currently has about a $3 billion market capitalization advantage over Apple: $159 billion vs. $156 billion. Remember, Apple has its Macworld User Conference set to start today, drawing an expected 50,000 professional software developers and Apple also has yet to report the December quarter too. It should be an outstanding number, both top and bottom line.

I wrote last week that I have moved my price target on Apple Inc. (NASDAQ: AAPL) for the umpteenth time and it now is set for $300 within 12 months. The company has so much momentum in all of its products, and margins are holding up and in fact could be expanding.

The December quarter will be announced in late January, and expectations are set for $9.32 billion in revenues and earnings per share of $1.52. I believe Apple will exceed these expectations -- again -- and of course forward numbers will be raised once again.

Besides the iPod, the iPhone, and the new Mac with the new Leopard operating system, the other variable in the story is difficult to quantify. That variable is Apple's retail stores and the feeling a consumer gets while visiting one. I went to one over the weekend and was in the store for over an hour, just observing the customers and the sales staff. Man, it was unreal.

Yes, the malls were busy this weekend before New Year's Day, but the Apple store was busier than most of its neighboring stores. The one I visited in the Ridgedale Mall in Minnetonka, Minnesota. is a small store in comparison to the flagship Minneapolis Great Mall of America store, yet it was comfortable and there was a buzz. The amazing part of the Apple stores is nothing is "on sale." No need for sales, the stuff just sells like hotcakes.

Look no further for the biggest Money Winner of the year ... why, it's Apple's (NASDAQ: AAPL) Steve Jobs of course, recently named the number-one most powerful businessperson by Fortune magazine. Take that, Mr. Gates!

In 2007, the man with the scruffy facial hair and the omnipresent black turtleneck celebrated the 30th year of Apple, which was incorporated in 1977, and his tenth year since returning to the firm after a hiatus of nearly ten years. It was a banner year for multiple reasons including, but not limited to:

• The changing of the corporate name from "Apple Computer" to "Apple Inc.," a better reflection on the company's broad-based business.
• The launch of Apple TV, which can play video content downloaded from a computer onto a television. AAPL is expected to be able to unload between 1 million and 1.5 million devices during its first year of release. The 40 GB version currently retails at $299; the 160 GB is $399.
• The wildly successful unveiling of the iPhone, which saw surging demand despite an initial price tag of nearly $600. Time magazine named the device the "Invention of the Year" and sales topped even the most aggressive estimates.
• The debut of Leopard, a new operating system for Mac.

One of the wonderful things about the Apple (NASDAQ: AAPL) Mac and its operating system was that, because so few people used them, they were not an attractive target for hackers. Apple used that fact to market itself as an alternative to Microsoft (NASDAQ: MSFT) Windows, which is constantly fending off bugs.

All of that is changing now that computer users actually buy Macs and use Apple's new OS. The FT quotes Patrik Runald, an F-Secure security researcher, as remarking: "Over the past two years, we had found one or two pieces of malware targeting Macs. Since October, we've found 100-150 variants."

Now Apple will have to spend a lot of programmer time working on hacks the same way that Microsoft does.

The Apple hacking army is lead by a group called the "Zlob gang." It appears that they are very good at getting consumers to download software for things like watching video. All the person really gets is a virus.

It is a shame that the Mac is so successful. Now Apple will have to spend endless hours in a chess game with hackers.

Douglas A. McIntyre is an editor at 247wallst.com.

Apple Inc.'s (NASDAQ: AAPL) much-anticipated release of its new operating system, Leopard, is being met with some lukewarm reviews. Said Tom's Guide, a review site of both software and hardware and typically an Apple fan, "[this] Apple operating system, Mac OSX Leopard, was released before it was ready."

Cited as one of the most troublesome bugs is a glitch with the Finder program, the Apple equivalent to Windows Explorer. Again, Tom's Guide put it succinctly: "In Leopard, when Finder moves a file from one drive to another, it deletes the file from the originating hard drive, without first checking to see if the file arrived safely on the destination hard drive. If anything goes wrong during the file transfer, such as a momentary power glitch on the destination hard drive, the file would then be destroyed on both hard drives."

Apple has already issued an update on its website to fix some of the problems. There are a lot of bug fixes there: everything from email to iCal to Finder.

I have been writing about Apple Inc. (NASDAQ: AAPL) for the past ten months for AOL's BloggingStocks and have been a bull in every article. The shares have been a home run for investors in this difficult and challenging year. Apple is fast becoming the business school case study right before our very eyes as this company is executing flawlessly. Let's examine what's going on here in the calender fourth quarter -- Apple's fiscal first quarter of fiscal year 2008.

The stock has ranged these past 12 months from a low of $76 to a high of $192. Currently Apple is at $171 and this may be your last chance to buy it below $175. Apple finished its fiscal year 2007 with incredible numbers, margins, and more importantly, momentum, entering the new fiscal year. The new and improved Mac has taken market share and will continue to. The new operating system, Leopard, is enjoying rave reviews and quite frankly has the competition nervous. It should. The Mac sold 2.16 million units in the quarter ending in September, and the December quarter will only see upside to that number.

The revolutionary iPhone is exactly that: revolutionary. It is now the phone of choice from teenagers to the elderly. My two teenage children are only asking for one thing this Christmas -- the iPhone. With the price point down to $399, a whole new generation of buyers has emerged. Also, iPhone is debuting in Europe and Asia, where demand is already high. Apple will recognize iPhone revenues over a 24 month period as it matches the contract length of AT&T (NYSE: T), the service provider. Of course Apple will be reaping a portion of AT&T's monthly iPhone subscription revenue.

Imagine a product that many people do not think works well but sells millions of copies. Well, that's Microsoft (NASDAQ: MSFT)'s operating system, Windows Vista.

According to the FT, both business and personal computer users have tried to stick with older versions of the Microsoft OS, Windows XP, but adoption is still good enough to drive outstanding earnings for the world's largest software company. As the newspaper says: "None of this, however, has had any discernible impact on Microsoft's financial fortunes. Many companies buy their software from Microsoft under an arrangement called Software Assurance, which lets them upgrade to new software whenever they like in return for a fixed annual payment."

Perhaps that is what having a monopoly is all about. Even if products are not perfect, they are adopted. Even if companies normally would not make an investment, they are on an "automatic upgrade" program.

It might be nice to think that Linux or Apple's (NASDAQ: AAPL) new OS, Leopard, would get wider adoption, but based on most figures, the Mac has no more than 5% of the global PC market and no open-source desktop program has significant market penetration.

It's good to be king.

Douglas A. McIntyre is an editor at 247wallst.com.

MAJOR PAPERS:

• Walter S. Mossberg, who writes the Wall Street Journal's "Personal Technology" column, reviewed Apple's (NASDAQ: AAPL) new Leopard operating system, and said it was "better and faster than [Windows] Vista".
• Eli Lilly (NYSE: LLY) is halting two small studies of the most promising drug in its pipeline, prasugrel, which it hopes will bring over $1B a year in sales for the drug maker, reported the Wall Street Journal (subscription required).
• The Wall Street Journal reported that Microsoft Corporation (NASDAQ: MSFT) has beaten Google (NASDAQ: GOOG) in a closely watched contest, winning a minority stake in Facebook for $240M, and the right to sell advertising on the
  Facebook site outside the U.S..
• JPMorgan Chase (NYSE: JPM) is considering acquiring a stake in a Chinese brokerage as part of its expansion strategy in the country, said Gaby Abdelnour, chairman and CEO of JPMorgan Asia Pacific, reported the Financial Times (subscription required).
• The Financial Times reported that Nintendo (OTC: NTDOY) raised its earnings outlook and announced that its 1H07 profits had tripled, thanks to the success of its Wii video game console and the DS, its handheld games player.

Apple (NASDAQ: AAPL)'s newest Macintosh operating system -- Leopard -- will officially go on sale October 26 (just under two weeks from today). Unlike Microsoft (NASDAQ: MSFT), Apple releases new operating systems every year to two years. By contrast, the time difference between the release of Microsoft's Windows XP and Windows Vista operating systems was over five years.

That being said, so Mac users flock to upgrade every time a new operating system comes out? Hard to say, but every Apple fan I know borders on zealot (this is not a bad thing), and they do indeed upgrade every time something new comes out. I sense in many cases this is nothing more than psychological pride over genuine utility addition, but I could be mistaken.

Will Leopard's release bode well for Apple's coffers, then? Sure, but the question of how much is still up for debate. Apple's iPod phenomenon -- and now, iPhone phenomenon -- has translated into a growing market share for Apple PCs, and this "halo effect" has been tracked and followed with journalistic vigor in every nook and cranny of the media and blogosphere. What more could yet another upgrade add to this honey pot?

Apple's shares are sitting at an all-time high at the moment due to the perfectly-timed release of new iPods in September, along with the growing market for the revolutionary (yet already outdated in many ways) iPhone. Adding new eye candy to Apple's PC market will do nothing but help bump the company's stock price to over $200 if holiday sell-through does well. Perhaps the iPod was just a means to get customers flocking to Apple's PC segment, since in the long term, the iPod's remarkable sales sustainability can't keep up the torrid pace it has in the past -- or can it? Regardless, the company wants customers buying new PCs to think "Mac" instead of "Windows," and a newer version that looks and feels better than the last will only help that effort.

Beginning Monday June11, thousands of very technically talented people will descend into San Francisco for the Apple Worldwide Developers Conference 2007. The conference runs through Friday June 15. There are over 100 separate and distinct technical presentations and mini-lab sessions on the schedule. Apple Inc. (NASDAQ: AAPL) will use the opportunity to make sure everyone in attendance gets a beta-copy of the new Leopard operating system, due out in October, and of course the buzz will be the new iPhone.

Apple has been strategically advertising the iPhone on television and other media with the final message "due out June 29." The early adopters will sing its praises and the various media representatives will be there to capture every word. But what else does Apple have up its sleeve?

I wrote on May 31 that Apple and Google Inc. (NASDAQ: GOOG) have emerged as the two distinguished leaders in the technology sector. Both have hit new 52-week highs and the momentum in their respective earnings and revenues is compelling. They have taken over from the old guard.

Rumors have been circulating that Apple and Google will formalize a strategic relationship. Basically, Apple has grown weary of its dependence on Microsoft's (NASDAQ: MSFT) Office Suite, and Apple CEO Steven Jobs has indicated that Mac needs to "catch up." If Apple decides to include the Google suite of internet applications, it could be a blockbuster union of these two titans and a serious blow to Microsoft. Google's suite would include e-mail, spreadsheets, maps, and general document management.

Earlier today, Eric Buscemi noted in his daily Newspaper wrap-up that there are rumors circulating that the iPhone might be delayed. This is not even a week after the announced Leopard delay.

LOOPRumors reports that according to Smarthouse News Australia, insiders at Foxconn, the company that manufactures the iPhone for Apple Inc. (NASDAQ: AAPL), mentioned quality problems that could cause the delay in the original release date of June 11.

According to these reports -- and it's up to you whether you choose to believe them or not -- there are concerns over the device's sturdiness and battery life.

The rumors, I'm sure gain some credibility after the announced Leopard delay especially since the reason Apple gave for the delay is that it needed to divert resources from the project so that it could launch its highly anticipated iPhone on time.

Back then I said regarding the Leopard delay that "I have no doubt that after so many pundits have remarked about the serious consequences an iPhone delay would have on Apple stock, that the company decided to on this strategy." If on top of that the iPhone is delayed, look for a sharp correction in AAPL stock. But fear not, this company and its executives have been in tighter spots. It will rebound.

Update: The iPhone release date of June 29 has been confirmed as of June 3, 2007.

Apple Computer Inc.'s (NASDAQ: AAPL) week-long Macworld expo is kicking off tomorrow, and here is a look at what possible new products are being discussed on various tech blogs:

• iPhone: The most rumored of all Apple devices for months. There has been a ton of speculation that the iPhone will finally be unveiled at Macworld; however, MacRumors.com points out that "none of the more credible rumors have specifically pointed to Macworld as the launch date for the device." Another MacRumors post, citing the International Herald Tribune, discussed the iPhone, which they believe will be released at Macworld, and will be "closer to personal computers in pocket form."
• iTV: In September 2006, Steve Jobs introduced iTV and said it would be coming in the first quarter of 2007, which is now. The Unofficial Apple Weblog bloggers are predicting either the official announcement, the finalization, the release date, or the shipment of iTV. However, nobody seems to be sure exactly what it is.
• iLife and iWork '07: The annual updating of Apple's iApps should continue. ZDNet.com says in addition to these updates, we may also see the addition of a spreadsheet, rumored to be called "Numbers" or "Sheets." Not exciting, but not every Macworld announcement can be, can it?
• Mac Tablet: ZDNet.com writes that although this is the product they would most like to see, they are putting the odds at 100:1 that it will be released, due to the small potential market for tablet PCs.
• iSight: Wired.com believes we will see an updated iSight camera at Macworld.
• Leopard: There is a general agreement that the release date for the latest OS will come at Macworld.

Today, Apple (NAS: AAPL) throws some hype fuel on the fire with the new teaser appearing on their website...

...and the hype machine moves forward. Marketers and business folks take note: This isn't a case of over-promise and under-deliver as is so common in the consumer electronics industry, it's genuine excitement about a company that has a track record of rolling out products that consumers buy and apparently enjoy.

Much could be said of Apple, and the tenure of notoriously low-key CEO, Steve Jobs. Look at the massive success of the iPod, the transition to Intel-based computers, not to mention the original and subsequent iMacs. Oh yeah, and there's that little black mark dotting the headlines as of late, you know, the whole improper options granting thing.

Among all the headlines, two things are certain with the house that Jobs built: Secrecy and hype. Virtually every product launch since the iPod has a massive amount of hype surrounding every event, with Appleheads spreading rumor after rumor, and Photoshopped picture after picture, and with next week's Macworld, this event is no different.