The following is part of our week-long Rule Breaker series, where we Foolishly examine several companies and ask, "Is it a Rule Breaker?" Hey, even better, we'll answer the question for you.

We always knew that Apple Computer (NASDAQ:AAPL) was a renegade. It was producing attractive premium-priced computing machines that dared to be stylish at a time when its Microsoft- (NASDAQ:MSFT) powered rivals were busy getting cutthroat over bland and boxy systems. This is a company whose "Think Different" ad campaign wasn't just a catchphrase; it was a lifestyle. For better or worse, Apple always seems to stand out in a class photo -- but is it a Rule Breaker?

If you're not familiar with our Motley Fool Rule Breakers newsletter service, it's a premium research product that we launched last year. Every month we single out ambitious growth companies that are willing to take on conventional wisdom -- and dare to dream to win.

Apple certainly fits the modus operandi up to that point. Not only were the original Apple and Mac machines clearly disruptive technologies -- each one taking a bold step toward modernization that cut against the grain of what other computer specialists were doing at the time -- but they also created the lead that the rest of the market had little choice but to adapt to and follow.

Yet imitation wasn't just a form of flattery; it proved to be a vicious form of weaponry. Just as IBM (NYSE:IBM) opened itself to a sea of clones while Apple kept it proprietary, the Mac's revolutionary graphical user interface had Microsoft going from DOS to Windows as its operating software's eye candy.

Apple's competitors weren't putting out better products. However, they were putting them out smarter, eyeing the mainstream user every step of the way. So although Apple may have been calling the shots, it was doing so on a smaller and smaller throne as its market share started to evaporate. In a matter of years, the pioneer became a niche player, with its global market share bottoming out at 2% two years ago.

New and improved Apple
Now you know that this story doesn't have an unhappy ending. Pull up a chart and you will see how Apple's stock has quadrupled over the past two years. Its market share, creeping back up to 3% worldwide by the end of 2004, may not seem like much, but it is huge on a relative basis. Market leader Dell (NASDAQ:DELL) and Apple were the only two major computer companies to have gained thicker slices of the market over the past year.

And guess what? This might be only the beginning. The company's recent streak of good fortune started when it rolled out a portable digital music player known as the iPod. These days the company is selling more iPod units than it is computers, and its iTunes store has distributed more than 350 million legal music downloads. Yes, the company is going up against some pretty determined competition in the digital music space in companies such as Napster (NASDAQ:NAPS), RealNetworks (NASDAQ:RNWK), and even Yahoo! (NASDAQ:YHOO), but for now, the battle isn't even close. Apple is running away with it. Everybody wants an iPod, and Apple is the one selling them.

Music as a way to your hard drive
Ever use an iPod as a doorstop? Apple has. The iPod has become Apple's foot in the door to folks who were either weaned off Macs a generation ago or never really knew that there was a stylistically hip computing galaxy beyond the Wintel World.

Yes, the iPod and Apple's iTunes Music Store may be the salvation of the record labels and consumer electronics chains, but the biggest beneficiary has been Apple's flagship computer business.

"This may all ultimately grow the company's computer business again," I wrote 15 months ago, when the iPod was booming but still just 13% of the company's total revenue mix. "As traffic continues to grow at Apple's site and with more consumers loading up on Apple products, it will give the company a huge audience to market to."

That's pretty much the way it has played itself out. Last month, Morgan Stanley suggested that Apple's global computer market share may grow to as much as 5% thanks to the iPod. Where the investment banker's research once figured that 10% of the iPod user base would make the migration from the PC standard to the Macintosh platform, it has revised that figure up to a whopping 19% projected conversion rate.

Two weeks ago, the company posted a 70% spike in March-quarter revenues on a breathtaking surge in profits of better than 500%. So if the earnings report, the stock chart, or the Wally World Moose out front didn't tell you, yes, Apple is back.

But is it a Rule Breaker? You have to love just about everything that the company is doing these days -- and it is once again laying down the bread crumbs for everyone else to follow -- but Apple is also now a respected juggernaut with a $30 billion market cap. Sorry, Apple, you're just no longer the same low-lying fruit that you once were. That doesn't mean that you aren't spectacular. You are. That doesn't mean that there isn't room for even more heady gains if things go according to plan. There are.

It's just that the typical stock pick in Rule Breakers will command a much smaller market cap. Why? Because we prefer to single them out while their disruptive technology is just starting to make a mess of the industry standards. In Applespeak, we like to find promising companies while they are still in the Jobs-and-Wozniak-tinkering-in-the-garage phase. If that kind of growth investing sounds appealing to you, come and join us for a free 30-day trial subscription.

Invest Different.

Some other Apple headlines in the literary orchard:

  • Apple did produce stellar quarterly results earlier this month.
  • In Halloween 2002, when Apple was fetching a split-adjusted $7.35, I thought it would be more treat than trick.
  • Check out some of the ultimate growth stocks that are making the cut in our Rule Breakers research service.

And for related Rule Breaker Foolishness, check out:

Longtime Fool contributor Rick Munarriz has always had a thing for stocks that begin with the letter A. However, he does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.