Peter Burrows wrote a popular and, as always with Apple, controversial BusinessWeek cover story about Apple's gains in the corporate world. Never mind, its utter lack of trying. He joined me to talk about the story, how this plays in the Mac's overall market share gains and what it could mean for Apple's already strong financials.

From Silicon Alley Insider, May 2, 2008:

iTunes' big studio deal announced yesterday? It's going to be an expensive one for Steve Jobs who's taking a loss on each film sold. Some terms from the WSJ: Apple (APPL) is paying $16 to the studios for each new release, and will sell the films to consumers for $14.99.

It's a small price to pay to gain a foothold in the market, but a sign the studios aren't planning to give up the margins they've enjoyed for decades in the traditional home video business.

But it's also a change for in strategy for Apple: While big boxes like Wal-Mart and Best Buy have been happy to use media as an outright loss-leader, Steve Jobs has previously tried to break even or better with iTunes sales.

But here's a question: Did Apple get a better deal than the $17 Wal-Mart pays the studios for new releases on DVD and is Wal-Mart cool with that?

David Herro, Harris Associates' chief investment officer - international, is best known for his international stock-picking prowess. SmartMoney dubbed him one of the "World's Greatest Investors" in 2007 and Morningstar named him 2006's "top international fund manager."

More recently, Herro has gotten attention (some unwanted) for being a steadfast bull on European banking stocks caught in the global credit crisis, as detailed in an earlier video. He's also taking a contrarian stance on the state of the economy, as detailed here.

Herro, who directly manages $20 billion, also sees value and opportunity in big-cap tech stocks like Intel, SAP, and Hewlett-Packard. Herro is also placing a big bet on Michael Dell, arguing his namesake company is a turnaround story that could post huge returns for investors willing to look beyond Wall Street's short-term focus.

From Silicon Alley Insider, April 24, 2008:

Summary: Microsoft's quarter was mixed--not the blockbuster Wall Street was looking for. FQ3 revenue was slightly below consensus (surprising). Operating income and EPS were b (after factoring out impact of EU fine and a reduction in the tax rate). June revenue outlook okay, but EPS guidance is below current consensus. FY2009 guidance fine--above consensus for both revenue and EPS. Not surprisingly, stock is down.

Impact on Yahoo deal: This will make it more difficult for Microsoft to complete the deal. In recent days, the bid value had climbed almost all the way back to $31. Now it will be down again. If Microsoft wants to raise its offer, it will have to offer more shares or cash.

Revenue of $14.45 billion is slightly short of consensus. This is disappointing.

EPS b: $0.47, above guidance, consensus, and whispers due to ber than expected operating income (EU fine and tax benefit canceled each other out). This is good, but won't likely neutralize concerns about revenue.

Free Cash Flow: Actually down year over year on lower cash from operations (lower deferred revenue) and higher capital expenditures. Lower deferred revenue also not good news.

Outlook: June revenue guidance is fine--range of $15.5-$15.8 billion, modestly above consensus of $15.6 billion. June EPS guidance, however, is below the current consensus: $0.45-$0.48, versus the current consensus of $0.48.

2009 Guidance: FY2009 revenue guidance is good--range of $66.9-$68.0 billion, above current consensus of $66.5 billion. 2009 EPS guidance is very good: $2.13-$2.19, above consensus of $2.10.

Segments: Only division that exceeded consensus was Entertainment and Devices (which is essentially irrelevant). Windows and Office both lagged.

Microsoft (MSFT) reports FQ3 earnings after the close. The conference call will start at 5:30 pm EST. We will analyze the results and commentary live here, beginning at 4PM ET.

PREVIEW

Microsoft's last two quarters have been blockbusters, and the Street is expecting another one. Wall Street's printed expectations, meanwhile, are in line with the company's conservative guidance, which could set the stage for a blowout. Expectations are high and the stock has already run up, but a great quarter could send Microsoft's stock still higher, despite the dead-weight of the Yahoo deal. This would raise the value of Microsoft's bid for Yahoo, thus providing the face-saving carrot necessary to get Yahoo to the negotiating table. Microsoft's outlook and commentary about the U.S. and global economy will also obviously be critical--for the company, tech sector, and market.

From Silicon Alley Insider, April 23, 2008:

Apple (AAPL) reports Q2 earnings after the close. We'll analyze the results live starting at 4 p.m. ET with the release and continue through the conference call, which begins at 5 p.m. ET. (Live coverage here.)

The big question: How many Macs did Apple sell? The Street expects sales of 2.0 million, but we've seen estimates as high as 2.2 million (RBC's Mike Abramsky) and whisper numbers up to 2.3 million. Anything below 2.0 million would be disappointing. But anything over 2.1 million Macs would be "a significant positive," says Piper Jaffray analyst Gene Munster. Selling 2.1 million Macs represents 38% year-over-year growth, significantly higher than the average 26% y/y Q3 growth the last three years.