Oh, that crazy Apple (NASDAQ:AAPL). In a volatile year for all our markets, this company endured wilder swings than most, but the stock still ended up a better performer than major competitors such as Hewlett-Packard (NYSE:HPQ), SanDisk (NASDAQ:SNDK), or Micron (NYSE:MU). Dell (NASDAQ:DELL) seems to be the only rival putting up a credible fight, warts and all. Let's review a disappointing yet very impressive 2006 for the hip designer of media players and personal computers.

In the first quarter of this year, Apple stock took a hit because management issued short-term guidance below the Street views. But fellow Fool Tim Beyers told us to stop worrying about the company, since the long-term business was still intact. How right he was.

Come the second quarter, consumers were still waiting for those Intel (NASDAQ:INTC)-based Macs that were pre-announced back in 2005. Sales came in a bit soft, but earnings exceeded that pessimistic guidance. And once again, management warned that the near future looked a bit slow, and the stock price continued its long slide.

Apple thrives on a steady stream of product announcements, but there wasn't much news to fuel the third quarter. However, the Intel Macs trickled into the marketplace with promising early sales, and it looked like a great setup for the back-to-school season.

Indeed, the fourth quarter seemed really good, thanks to all those kids needing spiffy iPods and Mactel laptops for the new school year. But the results reported were just preliminary, as the company launched into one of those options accounting reviews that make reliable financial statements a thing of the past. Those Intel-based Macs sold like hotcakes, and iPod shipments rose once again.

The Foolish bottom line
All in all, Apple has had a great year. In the rearview mirror, the Intel decision looks spot-on, and that two-headed iPod/iTunes beast just keeps tearing up the media-player market. It wasn't entirely smooth sailing, with options concerns, delays in the supply chain forcing a change of plans for the next-generation video iPod, and the stock dropping more than 40% over the first half of the year. But the share price has climbed comfortably above the tops of January again, and the market doesn't seem to care about the accounting issues.

But what does the future hold? Well, our Motley Fool CAPS community members have something to say about that. Just take a look at how the overall sentiment stacks up:


CAPS Rating ** (out of five stars)

Total Bulls


Total Bears


Bull Ratio


Bear Ratio


As you can see, the majority of CAPS players think that Apple will outperform the market, but there are plenty of "underperform" ratings among the top players of the game. Hence the scarcity of stars, despite the solid bull-to-bear ratio.

This is why Michael Sarill (TMFCramerica) loves the stock, for example:

"For all Apple's recent growth lately, its share of the PC market remains at roughly 3%. There is huge growth potential here. And as an Apple consumer myself, I am well aware that all of the incredible features that the world loved about the iPod (incredible user interface, powerful, clean, beautiful) are baked into each and every Apple product, including their PCs. It's only a matter of time before the PC business takes off."

If companies like Apple excite you with their rule-breaking ways, you might be interested in our Rule Breakers newsletter, too. Our guide to the market's best iconoclasts is beating the S&P 500 by 7.9 percentage points, and a free 30-day trial is yours for the asking.

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Check out the other companies featured in "The Motley Fool's 2006 in Review and 2007 Preview" special.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure comes in more than five stylish colors. Intel and Dell are Motley Fool Inside Value picks, and Dell is also a Stock Advisor selection.