2004: Seems there’s more hand-wringing regarding Apple’s computer market share. Andrew Neff, a Bear Stearns analyst, calls Apple’s market share loss “worrying.”

I’ve little use for most analysts. Except for a rare few, most do a magnificent job of underperforming. In fact, our national paper runs an interesting contest every year where an object or animal is used to pick a stock. A group of the best analysts willing to put their reputation on the line also pick a stock. The newspaper reviews the performance of the stocks a year later. Invariably, the object or animal winds up in the middle of the pack. One year, a baby orangutan from the local zoo was the challenger and placed fifth out of nine participants. Another year, a wind-up Santa toy took first place.

Aside from making amusing reading around Christmas time, this firmly establishes the healthy habit of ignoring most advice from analysts.

“Neff is concerned that Apple’s ‘Trojan Horse’ strategy – persuading iPod users to buy Macs – isn’t working. Though iPod and iPod mini have sold well, Neff is concerned this has not translated into strong Mac sales, particularly of G5 Power Macs.”

In this case, I’m a little uncertain how Andrew Neff came to his conclusion.

I’ve never really believed that the iPod was designed to drive Mac sales. I believe the iPod was designed to create a new revenue stream for Apple. When things don’t look so good in your home market, it’s a good idea to seek profits elsewhere. Of course, this can end in disaster. In this case, it didn’t, and Apple has realized handsome profits and cultivated a dominant position in a new market. By any measure, this is a success.

Andrew’s comment underlines some confusion in the market regarding Apple’s status. Is it a computer company? Is it a consumer electronics company? Is it a software company? And how on earth can we fit this square peg into the round hole we love so much?

Here’s what analysts should be looking at: Is the company profitable? Can the company sustain profitability over the long term?

The answers are yes and yes.

Does an analyst become worried because PlayStations may be affecting Vaio sales? No.

Apple is in a good position right now. While computer sales can always be better, it remains in the black. If Apple decides it’s time to sit back and smell the roses, dear Mr. Neff may have a point. He’s assuming, though, that Apple will stand still in the market and keep feeding off the sales of increasingly outdated products.

This may be a possibility, but I feel that Apple’s engineers and designers are squirreled away somewhere designing the next great thing that will keep generating money for the company. While I may not think it’s possible, if the Mac’s market share should ever shrivel into nothingness, Apple will have other products available that will pay the bills.

While I’d love to charge a high hourly rate for this advice, I’d say that Apple will remain in good fiscal health for quite a while yet.