The Apple Computer, Inc. (NASDAQ:AAPL) pundits are on the rampage this month, claiming that iTunes sales are plummeting and the growth that Apple's music (and movies and videos and television shows) sales engine may finally be slowing down a bit. My thinking? So what?

There are so many bloggers and obsessed mathemeticians who have tried to calculate what Apple makes on each iTunes transaction, and the results come back pretty much the same -- Apple makes very little to nothing on the sales of each iTunes track that is downloaded. My question: Why does Apple need to make a cent on these sales? In fact, even if it operates at break-even, that's fine.

The mode Apple obviously works at is to get customers to buy iPods that integrate flawlessly with its content service. In an odd twist from normal hardware/software selling patterns, the money in this case is made on the hardware. And lots and lots of money is made. By giving such a good deal away at next to cost and by providing the best device-content user experience, Apple has not even been close to being dethroned from its perch.

It's very true that declining iTunes sales could be a possible harbinger to a slowdown of iPod sales -- and that should cause a concern, as that is roughly a third of Apple's sales at this time. Although a five-year run for the iPod shows no signs of slowing, it will some day. It has to. Until then, what's the big concern with iTunes sales?

As BloggingStocks' Doug McIntyre noted earlier, shares in iPod and Mac maker Apple Computer, Inc. (NASDAQ:AAPL) are sitting at a pretty decent level right now -- above $80. Is there room to move up even more? If so, it's going to take a lot to convince major institutional investors and watchdog houses who see the pinnacle of Apple's current success -- the iPod -- hit the five-year milestone. Perhaps they will consult with Miss Cleo about how long this iPod-frenzy can last, since the iPod is central to Apple's recent success.

Of course there is quite a bit of truth to that, but there is more to Apple than just the iPod. By accident or design, the iPod has taken sales of other Apple products like the MacBook for the ride as well, and Apple's market share in the PC market has only grown recently.

I doubt this is due to the virus/malware problem that the company touts as why Macs are better than Windows PCs. It's probably due more to the iPod culture and the attention to cool design that Apple has bestowed in the consumer electronics field. Many consumers are now paying attention to design and style instead of PC horsepower and feature lists that are as indecipherable to many of us as Egyptian hieroglyphics.

Does Apple CEO Steve Jobs have a transition plan for the inevitable decline of the iPod? Remembering product cycle patterns that happen in the business world, the iPod may indeed be on the downward slope -- and investors may get antsy as sales slow someday soon. What will pick up the pace for Apple so that its shares don't plummet when this happens?

Steve Jobs may be holding the answer in the neck flap of his daily turtleneck for nobody else to know...until it's too late for competitors to respond. He won't tell the investment community for fear of letting the competition know what is going on. Investors may be skittish, but the magician Jobs is probably laughing in his sleep. Hey, what you don't know won't hurt you, right?

One of the hotter Christmas gifts this season -- again -- is Apple Computer Inc.'s (NASDAQ:AAPL) iPod in its various flavors, along with the pink Nintendo DS, which I can't find anywhere today, online or offline, after doing some preliminary searching. Techie toys always go first it seems.

So how can quite a few new Apple iPods disappear from a local Best Buy Company Inc. (NYSE:BBY) store? In Pembroke Pines, Florida, police are investigating a complaint by a local Best Buy about the disappearance of more than $35,000 worth of iPods. Now, that is one heckuva lot of iPods.

A preliminary investigation revealed that there had not been a break-in or forced entry into the store. This means that the disappearance of all those iPods is most likely an inside job.

Those are some stuffed pants I guess. Or perhaps the back dock door was raised and a pallet of iPods snaked out of the store that way? Whatever the technique, look for eBay Inc.'s (NASDAQ:EBAY) auction site to be flooded with these iPods soon. Where else do you get rid of so many hot holiday items?

The Zune launch is over, and pundits both pro and con have had time to assess if Zune really came out swinging or went down. But whether the Zune sinks or swims, it might already have changed the field of digital media players forever.

Never discount the business strategy of the canny Microsoft Corporation (NASDAQ:MSFT). In this case, the win was getting together with Vivendi/Universal to offer it a small royalty for every Zune sold. The cut probably got Universal to agree to give Microsoft access to its music and sweetened the relationship between the two companies. As many reporters have noted, this has record executives sitting up and interested in similar deals with cellphones, and ultimately, with other digital music players. Just yesterday Universal mentioned that it would like to seek a royalty deal with Apple as well. The idea is spreading, and media companies are going to start bargaining for this.

What may have began as a way for Microsoft to help push Zune sales by giving Universal a stake in the outcome could possibly foreshadow a future where any item you buy that plays music already pays the record companies their kickback, even before you ever downloaded a single song. It will impact pricing, which will get passed on to the customer, and it will be another way multiply what you pay for music.

In some European countries and Canada, taxes are levied on media like CDs to reimburse artists and media companies. But a royalty cut like the Zune/Universal deal will probably not reach artists, but remain a company-to-company deal. It's a very different beast we're looking at.

If the Zune becomes even remotely successful, you will pay the Zune tax whether you own a Zune or not -- because this new precedent will be something for which many media companies will bargain hard. If the iPod remains dominant as it has been, Apple Computer, Inc. (NASDAQ:AAPL) can hold the ground with status quo, but even Apple could see the business sense of getting media companies involved in the iPod's success, as Microsoft did with the Zune. Will they resist this siren call?

Only time, and Zune sales, will tell.

Apple Computer, Inc. (NASDAQ:AAPL) had so much success with its iPod/iTunes digital music and video ecosystem over the last five years. Much of that success that most other companies can't seem to duplicate includes an easy-to-use interface (competitors are catching up, though), excellent design, a knack for chic marketing and a perfectly-placed mystique about the product that makes each one unique. Apple even gives consumers free engraving on most iPods -- who else does this? Nobody.

But, along with those accolades come consumers who would love to use the iTunes platform to purchase music, TV shows and now movies, but who don't necessarily want to use an iPod to view and listen to all that content. Enter DVD Jon, now 22-years-old, who years ago busted the encryption used on DVDs to prevent copying of actual physical media that customers already owned. I applauded his move when the information and technology became public, since music and movie studios presume all customers are thieves (we aren't) and try to control content I've already paid for.

Well, DVD Jon now has involvement with a new company, DoubleTwist Ventures, which aims to actually "add" digital copy protection to music files. This will allow music from other download services to be used on your "protected" iPod, as well as letting Apple's iTunes see music and video players not made by Apple as "iPods," so that iTunes content can be downloaded into non-Apple digital media devices. Is this illegal?

After all, this new service by DoubleTwist is not removing copy protection, nor is it bypassing protection -- it's just allowing cross-platform usage of media we'd all love to have and enjoy, but can't since so much ridiculous digital protection is in place everywhere. Since the hardware and software companies have not provided what consumers want, I guess DVD Jon will be providing it. Kudos.

Apple Computer, Inc. (NASDAQ: AAPL) ended the day up 63 cents, 0.78%, to finish at $81.68. The stock seems to be holding steady to the ground it made last week.

Our own Jon Ogg makes a convincing case for the iPod's FairPlay encryption being hacked and offered to other companies to use as being a good thing for the iPod ecosystem. He reasons that this would encourage more people to use iPods. Jon's thought is backed up by the fact that 'DVD Jon' himself said he talked to Jobs about it, who said Apple wouldn't sue him, but that he would have to keep an eye out on the music companies.

Why is Apple Computer, Inc. (NASDAQ:AAPL) as successful as it is? Many would argue that it is the detail-obsessed Steve Jobs, who reportedly oversees almost every product down to the last minute detail. This level of involvement from the top down makes for a rather frustrating environment for subordinates who don't always commit to the leader's vision. Yet, it is precisely this commitment that Jobs has -- his consumer experience and detail obsession -- that can lead to great things, even in the face of hardship. And it is precisely this commitment he demands.

I admire Apple highly just because the company designs for use, not for features or other things other manufacturers seem to always market to these days. It's still beyond me why many mainstream companies don't pay attention to design, slick marketing and user friendliness in their products when there are so many examples in the business world where these traits are very successful. Jobs has made it a point to push Apple employees to do more than they could have imagined possible, making the frustration worth every sweat of the brow when an employee can share in a company's success -- and Apple's had plenty of that over the last five years.

What about Google, Inc. (NASDAQ:GOOG) then? Google's larger-than-life success has been in its search engine. But the company has also released product after product. How? Google's been snatching up talented people and then giving them enormous latitude to make new products -- just like Apple. Unlike Apple, though, the employees themselves are seemingly in charge of what they create. Google managers even encourage engineers to spend about 20% of their time on projects they're passionate about. Now, the trick is for Google to make money on some of these products, which it hasn't generally in the past (no matter how good the products were).

Push your employees by having a raving perfectionist and incredible cheerleader like Jobs, or push them by letting them do what they know they can and by giving them latitude? Both mixes seem to be recipes for success. With Google CEO Eric Schmidt now sitting on Apple's board of directors, these two companies may just be getting started. On what? That is anyone's guess.

In its most recent quarterly earnings report Apple Computer, Inc (NASDAQ: AAPL) indicated that it shipped 8,729,000 iPods this last quarter, some 35% more than in the same quarter last year.

When asked, Apple indicated a large portion of the increase in iPod sales was due to the new iPod Nano that was recently rolled out. iPod demand accelerated and Apple said it was one of the reasons they exceeded quarterly expectations in iPod sales, iPod sales being a key component to Apple's strong performance since the iPod debuted.

This is a sharp contrast to the more frustrating initial launch of the iPod Nano, which though it did well, began with customer frustrations about easily scratch-able faces and screens. The new Nano seems to have hit the sweet spot for Apple and its customers.

Tobias Buckell is an author, freelancer, and professional blogger. He owns shares in Apple.

It seems that every other week, we're all hearing about the current nonsense of stock options backdating that executives and not-so-creative accountants used in the dire days of the 2001-2003 market downturn to ensure the liquidity of most executives, which mostly sits in stock. This did not sit well with the investors who support their companies. How nice.

Even Apple's Steve Jobs, hailed as the savior of all-things-media these days, is not immune to the stock options backdating scandals that rock so many public companies these days. Graef Crystal over at Bloomberg goes so far as to say that perhaps Jobs should return $85 million of his net worth back to shareholder. This $85 million was gained when Jobs apparently backdated some of his own options that were granted when AAPL shares were tanking with the rest of the market. I like the words "sleight of hand," which is exactly what many execs and CFOs were doing to ensure -- omygosh -- that their precious stock would not be turned into underwater options upon being granted.

Crystal goes on to say that Jobs stood to gain a wallop of cash (options) from a January 2000 transaction that involved the single-largest stock option grant for a single day that he could find. Additionally, the grant was perfectly timed to give Jobs all the advantage. Nothing is new here -- this most likely happens in many options grant scenarios and probably takes a seat in the official timing of executive hires. The timeline given here paints a goofy picture, and while Jobs is a saint to many, he's not one to some in the financial community.

Apple Computer, Inc. (NASDAQ: AAPL) closed today at $74.63, up 41 cents or 0.55% on a day where the stock price just marched steadily and slowly upwards.

The big positive news for Apple was ThinkEquity's Jonathan Hoopes keeping a 'Buy' rating on Apple because he thinks everyone is overreacting about first-quarter fears on Apple sales. This general optimism is repeated by analyst Shaw Wu at American Technology Research, who anticipates increased MacBook sales and iPod rebound sales due to the iPod Nanos.

The options crisis may slow the stock's rise, but as Hoopes said and Macworld UK points out, Apple's last options payout was in 2002 after which it ceased the practice. This isn't a scandal in the sense that Apple did something no other company did and is being dragged out into the light. Eighty or more other corporations are being investigated and dragging out the process. Apple has done their own investigation, cleaned house, and is moving on. And the stock price is reflecting that.

In the Philippines' largest newspaper, writer Chin Wong, blasts Apple Computer, Inc. (NASDAQ:AAPL) for not selling songs or movies from its iPod music store to consumers in most of Asia. Apple's marketing director of Asia was quoted saying, "we cannot comment on the specifics but it is true that iTunes is not available in Asia. That goes for music and movies." It seems at odds with Apple CFO Peter Oppenheimer's recent statement that "Apple sees the rest of Asia as an opportunity to increase market penetration."

Isn't it counter-intuitive that five years after opening its iTunes store in the United States, the leading digital music market service in the world can't seem to provide the same services to the millions of people in Asia who own iPods? Wong adds, "(Apple should) start treating buyers here with the same respect that you give your customers elsewhere in the world." Although Apple won't admit to a specific reason for not opening its store in most of Asia, Wong asserts that it is due to piracy issues.

Is Apple scared that people in Asia will download their products for 99 cents and resell them for 10 cents a piece on CD's in the third world market? Or is it the music publishers who are scared for the same reason? Either way, Apple should man up and stop dancing around the issue, or at least give them a plausible reason for not doing so.

Ironically, by not opening its store in most of Asia, the company is indirectly encouraging piracy by driving iPod owners to the p-to-p networks.

Apple Computer, Inc. (NASDAQ: AAPL) finished the day at $74.86, down $2.12 or 2.75% as Wall Street stocks closed lower in general, with Tech stocks having a rough day along with the rest of the market.

Part of the drop in price is explained by Apple getting hit with a downgrade today by Citigroup's Richard Gardner, with the company putting Apple on 'hold' instead of 'buy.' Although, oddly enough, Citigroup raised the target price of the stock with the downgrade to $85. Also, even more oddly, Gardner cites the lack of a new video-iPod with a larger screen as being another reason he downgraded the stock.

Apple is a great stock to be a contrarian on in the past, and our own Doug McIntyre offers some more solid reasons to be worried about Apple's runup, but its worth noting that irrational iPod fears have driven the stock down before and other analysts aren't tripping over themselves just yet to downgrade the computer manufacturer.

This just in -- looks like Microsoft bowed to the wishes of most digital music and media fans, and will release the Zune player with a price tag of right at $250 shortly, as the holiday 2006 shopping season is, gulp, just about here even though we're just at the end of September.

The Zune, which will feature a 30GB hard drive and the ability to share content wirelessly via WiFi wireless, will also be able to sync to and use the Zune music store, where I am anxious to see if the amount of content available on launch will be compelling enough for Microsoft to start making a dent into the Apple iPod universe.

It won't be easy -- Apple has a five-year headstart and even though Microsoft has committed $500 million to the Zune adventure, it remains to be seen if even Microsoft can dent Apple's firm grip on this marketplace. Microsoft does not give up easily and has the deepest pockets of all, but that may or may not make a difference here. Details to follow in 2007 and beyond.

[Disclosure: I own MSFT shares as of 9-28-06]

With of the Microsoft Zune digital media player, the questions that will coming soon will be the big hitters: How much will the 30GB Zune (the only capacity announced at this time) cost? And how will the Zune store work with downloadable media? Although the has been speculated on for quite some time lately (leaks galore), the *official* announcement from Microsoft was today. The Zune will be available in WiFi-flavored colors , black and white, with the single 30GB capacity (enough for most people I would think -- YMMV).

We still do not know how much it will cost. My guess? $299.The *real* question is how Microsoft's Zune music store (simply titled "Zune") will compare to Apple's iTunes music store. Not only is iTunes very easy to use, by most accounts; it's the source of all the content comes for millions of iPod owners. Music titles, television shows and now, full-length movies, are available at iTunes. It's the mecca of online content in the audio and video realm -- but will the Zune store be comparable? That is key, even with the Zune player featuring more features than any iPod, including WiFi wireless networking, an FM tuner (who listens to FM these days?) and a very, um, unique design (I guess).

The design is nothing earth-shattering (from first glance), but definitely is a break from kludginess in grand Apple fashion. If the Zune store can be as easy to use as iTunes, features -- over time -- an impressive and flexible array of content for Zune owners, and if it evolves to have different kinds of video and audio media available similar to iTunes, the Zune/Zune Store world may become a decent competitor to the iPod/iTunes universe. It'll take time, but Microsoft has a good start here. The bar has already been set by Apple, however.

[Disclosure: I own MSFT shares as of 9-14-06]

Reading over this blog post yesterday, I was surprised to read of such an abysmal situation with an Apple iPod, iTunes version 7 (the newest version just released Tuesday) and, gasp, a disappearing and expensive iTunes music collection. Wil Wheaton, one of this network's bloggers from Card Squad and TV Squad, downloaded the newest iTunes software and started running into what appears to be immediate problems.

Wil says that he'd enabled manual music management (as opposed to the iTunes automatic music management that Apple trumpets quite often). When he did that, though, all his iTunes-purchased music went away. And away. Nowhere could his music be found on his computer, his iPod, or floating in the air somewhere. It seemed completely gone.

Now, normally this is not expected from Apple products which, at least in perception, work beautifully, wonderfully and without worry to the millions of users who devote the back of their heads to Apple product. But Wil's case is rather harsh -- many an Apple customer would be quite distressed to find that the great sum of money paid to the iTunes music store had simply vanished if their music collections became part of thin air due to some kind of unique and odd misconfiguration -- not due to the customer.

Has this happened to other iTunes and iPod users? For those with a fairly complex iPod environment with multiple "authorized" PCs and whatnot, has this happened to you? What did Apple do about it, if anything? To Apple's credit, and my hats off to the power of blogs, an Apple customer service agent called Wil and re-authorized his entire music collection so he could re-download all prior-purchased music.

So, in the end, the issue was resolved, but only after Apple was alerted to Wil's blog post detailing the rather exquisite situation and how it unfolded. This could have happened to anyone, though, and with Apple's tight control on DRM (Digital Rights Management), which works wonders for the *masses* so that downloaded music can't be shared all over the planet instantly, in this case it was a huge cause of massive frustration from a good paying customer. This is not the kind of customer Apple needs to let down, yes?