So Apple is supposed to come out with a tablet computer, possibly called the iTablet. Is that true? Well, if you believe some published reports that stretch back for months, it is, but the precise form of the new product depends on whom you ask.

Now understand that Apple seldom discusses unreleased products. There are rare exceptions, such as a forthcoming operating system upgrade, such as Snow Leopard, or even a new gadget that will be released a few weeks hence. In rare circumstances, that new gadget may be preannounced months ahead of time, such as the original iPhone at the Macworld Expo in January 2007. Has it been that long ago? It didn’t go on sale for approximately six months, which gave the naysaying pundits plenty of opportunity to rag on the product.

More recently, Apple has continued to blow cold water on the prospects for an Apple branded netbook. The official mantra is that these tiny variants of the traditional note-book computer are pieces of junk. They have squished keyboards, tiny screens, poor performance and there’s plenty of buyer’s remorse. Since Apple doesn’t build junk, don’t expect them to consider entering that sandbox.

Except, of course, that they do have some interesting ideas should they actually decide some sort of netbook form factor is their cup of tea. That, of course, takes us to the so-called Apple tablet, the variation on the theme that will supposedly take the market by storm.

Now understand that tablet computers, a favorite of former Microsoft CEO Bill Gates, simply never took off as mainstream computers. There are vertical market applications, though. Our family doctor, for example, uses Fijitsu tablet-based note-books in his office to keep tabs on a patient’s medical records and ongoing treatment. When you need a prescription refill, he simply enters the information with a stylus on his handy note-book and it’s emailed right to your chosen pharmacy. Or, if that pharmacy doesn’t process prescriptions in that fashion, to the office printer instead. Well, at least it looks fancy and all, and is probably a great addition to a physician’s practice. But a mass market product? No.

Supposedly the pressure on Apple to do something in a smaller form factor is caused by the fact that millions of netbooks are being sold. The theory goes that Apple is losing out of loads of sales by not playing that game.

That takes is to the alleged iTablet, which will supposedly debut this fall or early in 2010, depending on which version of the story you choose to believe. It will have a 10-inch screen, or perhaps a little less, and will be based on the iPod touch in terms of operating system and internal workings.

I suppose you could call it an iPod touch Pro, but that would be rather an awkward title, so I’ll stick with iTablet. I also favored iPhone before Apple’s hot-selling smartphone was originally announced, but I have no special resources for inside information of this sort. It was just a logically lucky guess.

This doesn’t mean there will be no iTablet, or whatever it’ll be called. I suppose it could blow the netbooks out of the water, although it’ll cost twice the price of the latter if you can believe the rumors.

The unfortunate thing about such stories is that a single rumor quickly begets another. The second report cites the original as confirmation that the alleged product is on track, and buttresses the story for subsequent variations on the theme. Soon you have an entire segment of the media reporting on something based on what might be nothing more than a misinterpretation of a subset of facts, or someone’s fanciful concept of what ought to happen.

On the other hand, I’ve always felt that Apple will, on occasion, stoke the rumor fires with a few of their own, carefully seeded to select members of the media, both mainstream and otherwise. So if you read a story in The Wall Street Journal or The New York Times about an impending Apple product or service, you can probably take it seriously so long as the source they site is not just a Mac rumor site. When a phrase such as “sources close to Apple” is used, you can almost feel assured that it did come from Apple, although not for direct attribution.

Depending on the lead time, Apple might use public reaction as a gauge as to whether or not such a product has potential — aside from their own internal marketing research and not just the gut feeling of Steve Jobs — or to get people talking.

It also keeps Apple’s name in the papers as it were. Right now, the only expected news from Apple in the near term is the official shipping date for Snow Leopard. Yes, it’s promised for September, but precisely when is still a matter of speculation. There is also talk of a new iPod line in September. Should the alleged iTablet be a consumer-oriented gadget, you might expect it to appear then as well, since it will stoke pre-holiday sales.

Or maybe Apple isn’t ready, and there will be no iTablet or a similarly-styled computer. Maybe it’s all just wishful thinking after all, and we can return to our normal lives and forget about the subject. So long as you don’t take it seriously, though, I suppose no harm has been done.

If you can believe The Wall Street Journal, the main reason Microsoft suffered reduced sales is because of the “PC Blight,” which refers to the economic downturn affecting the PC industry. They sell less, so it means Microsoft distributes fewer OEM licenses, from which they earn most of their software income.

However, millions of netbooks with Windows XP preloaded on them are selling, so didn’t that make the difference? Not quite. You see, in order to get PC makers to ditch Linux and still keep the prices ultra-cheap, Microsoft had to dump cheap XP licenses on them. In other words, they were forced to push an eight-year-old operating system, because the current one, Vista, was too sluggish to run acceptably on these little boxes and, of course, too expensive.

Supposedly Windows 7 will be beefed up enough when it comes to performance to run acceptably. At least Microsoft is banking on that to gain decent sales in the final quarter of the year, but is that true? It’s hard to know, because there’s not much beta experience to depend on. Even then, you can’t assume that a beta version of an operating system represents the final product, or even that some of the people reporting great performance and fewer problems aren’t paid shills quietly doing Microsoft’s bidding.

Vista wasn’t such an obvious train wreck until it was actually released, and the truth was clear to one and all, although it’s also true the beta experience was less favorable. Or maybe Microsoft didn’t recruit a sufficient number of hacks to boost Vista’s prospects with impossibly positive spins instead of genuine reviews.

Story continued in this week’s Tech Night Owl Newsletter.

I am sometimes accused of writing lurid headlines just for the effect or the higher hit counts. I don’t agree. The headlines always relate to the content, and in this case, my theory is right on the money. What’s more, recent figures based on retail sales of new PCs from the NPD Group confirm the trend that will ultimately marginalize the rest of the PC makers and push Apple to the top of the heap.

Indeed, we’re already seeing how the industry trends are hurting Microsoft. For the first time since 1986, Microsoft has reported a full  year decrease in sales. Indeed, the stock market Thursday afternoon quickly reacted to the news that Microsoft’s revenue fell short of analyst expectations, dropping some 7.8 percent in after-hours trading.

For the most part, Microsoft’s excuse was to blame the economy and declining PC sales. Every PC that isn’t built means less revenue for Microsoft, which gets its OEM fee from virtually every unit sold.

At the same time, Apple is reporting record sales and profits, and rapidly increasing sales of new Macs. But the trend didn’t stop in June. So far this month, sales have soared even further according to the NDP Group. Clearly Microsoft’s pathetic Laptop Hunter’s ad campaign hasn’t done much to stem the tide that now favors the Mac.

And that trend is far more compelling than you might think. What am I talking about? Well, here’s the pertinent quote from my friend Jim Dalrymple’s article on the subject: “According to data from market research firm NPD, Apple’s revenue share for PCs over $1,000 is 91 percent.” The information is based on June sales. Last year, the percentage was 66%.

Now it’s certainly worth looking at what this all means. First and foremost, this is the “revenue share,” which means how much money Apple takes in compared to other PC makers with products in that price category. It’s also based on surveys of the retail marketplace, which certainly excludes online transactions, direct sales to businesses and to educational institutions.

The trend, however, is telling. Basically, Apple is adding more and more value to its products, and is thus driving the PC industry to compete at the low end of the market, where profit margins are low, and they are forced to make up the difference on volume. This is particularly true for netbooks, where you have to question just how much a manufacturer can earn back from every unit sold. Sometimes I even wonder whether some of these products are meant as loss leaders, in an effort to upsell you to a model with more goodies, or to add accessories, where profits are really generated.

As you know, this surely doesn’t mean Apple has no Mac products under $1,000. There is that $999 white MacBook for example, but a lot of potential buyers look at that model, compare it to the $1,199 MacBook Pro, and choose the latter. That’s one reason why the entry-level MacBook Pro remains on back order.

Then there’s the Mac mini, starting at $599, which is a product that has seemingly never gotten its due. It is seldom featured in ad campaigns, yet retains a loyal audience seeking value but having no need for performance levels that none of their apps really require. In fact, author and commentator Kirk McElhearn recently transitioned from a Mac Pro with all its multicore goodness, to a mini. He says the performance dip was only observed when booting the computer, or ripping a CD. Otherwise, he doesn’t detect that much of a difference, simply because he doesn’t use any app that requires a faster model.

Now in all fairness, NPD Group’s Stephen Baker tells me that the retail figures favoring Apple aren’t fully as significant as you might gather at first glance. That’s because Windows PC box builders don’t offer that many models costing over $1,000 at retail stores, leaving Apple to fend for itself in that price category. However, if you want quality, the cheap PC may end up being a waste of money, and it seems that more and more people are realizing that very basic fact.

There is also, to be perfectly fair, a downward trend in PC prices. This even true for Apple, which cut the prices of the MacBook Pro and MacBook Air lineups to a surprisingly large degree last month. But they’re still above the magic $1,000 threshold, and it’s doubtful Apple has any incentive to make them cheaper.

So while the PC makers struggle to sell as many boxes as they can, with very little differentiation, Apple has carved a growing value segment where folks who are willing to acquire a computer with more features, greater build quality and reliability, have somewhere to go.

Despite the economic downturn, it’s clear that there are loads of people still willing to pay a fair price  for the best product. It also demonstrates that Microsoft is no longer invincible, and it will probably take extraordinarily high sales of Windows 7 and their other new products to turn things around.

With Snow Leopard still apparently on track for a September delivery, and the promise of revised desktops perhaps as early as this fall, Apple’s march to dominate the quality portion of the PC market will be complete. How far they’ll go from there is anyone’s guess. But I definitely predict ultimate doom for Microsoft, although their final decline is still years away.

As I write this, Apple’s stock price is soaring, and that’s a surprise. Usually, after they release record-breaking financials, Wall Street seems to react negatively. No, I’m not about to explain the workings of the financial community, and I doubt anyone can with any meaningful level of accuracy.

The biggest difference this time out is the fact that the world economy is on life support, yet Apple still managed to report record revenues for a non-holiday quarter. Those Wall Street analysts, who always seem to on the wrong side of Apple’s numbers, are now surprisingly bullish.

How things have changed!

You have to wonder whether Apple is somehow using magic to defy gravity, but it may come down to something that you can understand with simple common sense, and that is that they simply build products people want to buy. This despite the fact that Apple has some serious competition in all their market segments, yet they’ve managed to surprise the naysayers again and again.

When it comes to what used to be the company’s core business, personal computers, the biggest improvement appears to come from folks waking up one day and realizing that Windows isn’t for them. They’ve had enough of a bloated, buggy operating system that requires constant attention and powerful malware protection to work properly. Sure, a properly-configured Windows box can function reliably in the workplace, and certainly most businesses have them. But most of the employees who use them restrict themselves to a handful of apps that are preconfigured for them, and thus they exist within a fairly narrow confine and thus don’t need to stretch the boundaries. In many cases, these are customized applications designed for specific business functions, such as a bank or medical office.

To be sure, there is also an IT staff that, assuming they are appropriately qualified, will keep make sure those computers are properly maintained as far as deploying critical operating system updates. The company will also make sure that their security software of choice is regularly updated.

When it comes to home users, most are not nearly as careful about maintaining their computers. They are apt to allow allow the malware update subscriptions to lapse, which is a big mistake, because they might suddenly find themselves inundated with unwanted popups and other symptoms of an infected PC. Indeed, a recent issue of Consumer Reports, which is not quite Mac friendly, reported the results of a survey that indicated some $5.8 billion in losses could be attributed to malware outbreaks over a single year. Although there was no breakdown by operating system, it is clear to most anyone that all the losses can be blamed on Windows.

In recent years, Apple has claimed that 50% of the people buying Macs at their retail stores are new to the platform. While they aren’t being so specific about how those stats are compiled — and isn’t it strange the analysts don’t seem to want to ask this question? — I’m inclined to take those figures as accurate. If that’s true, it means that there is a growing customer base that has embraced the Mac way.

Time and time again I read reports about people buying their first Mac and experiencing what some might consider a revelation. Suddenly most things simply work. They don’t have to waste time messing with their computers. Instead, they can actually get some work done.

When it comes to mobile phones, the critics said Apple couldn’t possibly succeed. The market is saturated, and there’s no segment where they could possibly make a difference and earn good profits. Those critics forgot about smartphones, but Apple didn’t. So now there’s a fully-featured mobile device that regular people can actually master without having to resort to poorly-written manuals, or dealing with inscrutable user interfaces.

All right, I did actually read the complete iPhone user manual. You can download it from Apple’s site, or retrieve it online right on your iPhone. But most of the tricks of the trade are reasonably obvious. In contrast, take the free phone you get from your wireless carrier and see what you have to do in order to discover and use some of the basic features, such as managing your address book or even using the Web browser, assuming there is one. Does anyone really use those dreadful things?

These days, the public is voting with their wallets, even though they are slimmer than they used to be. Apple concedes that supplies remain constrained on some MacBook Pro models, and the iPhone 3GS has yet to be released in a number of countries, simply because you often still have to wait for one in the countries in which it is available.

None of this is magic. It’s a matter of hiring smart people and focusing their creativity into the right areas, so they can build great products. Far too many companies don’t seem to understand how to exploit the talent their employees possess, and that may be the biggest disadvantage of all.