Curious about iTunes LPs? For the price of some dreadful music, you can get one free.

Image: Apple Inc.

It's hard to imagine Steve Jobs choosing the tracks that appear on the "Holiday Sampler" Apple (AAPL) released this week, just in time for Christmas.

Barry Manilow singing "Jingle Bells"? "The Twelve Days of Christmas" done as an instrumental by the Mexicani Marimba Band?

This is the kind of music that makes you want to turn off the radio for the month of December.

If Apple really wanted to get people to check out iTunes LP — a bonus-filled format that hasn't exactly taken the world by storm — they would have done better to give away one of the good ones. For example, The Doors or the Dave Matthews Band albums that Apple demoed for the press last September.

This LP doesn't do the format, or the listener, any favors. Stephen Colbert, who may be the freshest thing on the album, has it right:

Get ready Brother for another Christmas song
They play for a month, Ad infinitum
One day it struck me someone must write 'em
So, it's another Christmas song

[Follow Philip Elmer-DeWitt on Twitter @philiped]

But some people may not be getting the computers they hoped for this holiday season

Image: Amazon.com

On the eve of Cyber Monday, Apple (AAPL) Macs held the top three spots on Amazon's (AMZN) "Most Wished For" laptop list, as well as the top four spots on the desktop computer wish list.

But wishes are not horses — or premium-priced Macs — and judging from Amazon's "Most Gifted" lists, some of those Christmas wishes might be filled by more affordable Microsoft (MSFT) Windows machines.

On the laptop "Most Gifted" list, the top two spots Sunday morning went to a $549.99 Toshiba Satellite and $418.98 Acer Aspire, respectively. The $1,199 MacBook Pro had been pushed to No. 3.

On the desktop computer "Most Gifted" list, three of the top four were still Macs, but a Hewlett Packard (HPQ) Compaq had moved into the No. 2 spot.

On Amazon's "Bestseller" lists — a broader measure of what's being purchased on America's largest online retail store — no Macs topped either list Sunday morning. But four Macs were among the top 10 bestsellers for both laptops and desktops.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Did Apple's (AAPL) unrelenting advertising campaign for the iPod touch as a game machine  ("The funnest iPod ever") pay off this holiday season?

Indirect data from two Web-based sources suggest it did — big time.

Net Applications (a Web metrics firm), and AdMob (a mobile Web ad network) both produced graphs last week with sharp Christmas day spikes of the kind you usually see only from runaway hits.

"iPod Touch requests on AdMob's network exploded on December 25th," according to AdMob's Mobile Metrics Report for December 2008. Ad requests from the devices — a rough measure of Web traffic — increased 3.4 times from November to December. Since July those requests have increased more than 16-fold, from 18 million to 292 million.

As a result, the iPod touch is now the No. 2 device on the AdMob network, with a 4.7% share. Combined, the iPhone and iPod touch now represent 15.5% of all worldwide requests.

Apple challenges Sony and Nintendo

The lion's share of those ad requests come from the United States, but AdMob's country-by-country breakdown suggest that the touch's impact is considerably wider than that.

To read a summary of AdMob's findings, or to download a pdf of the full report, click here.

Net Applications did not issue a separate report, but its day-by-day chart of page views shows a similar spike that settled down in the week after Christmas at a level roughly double what it was going into the holidays.

We won't know exactly how many units Apple sold this holiday season until later this month, when the company releases the results of its first fiscal quarter for 2009. Last year Apple sold 3.5 million iPod touches in 2008 Q1, which closed at the end of December 2007.

According to AdMob, the company "serves Graphical Banner and Text Link ads on mobile web pages for more than 6,000 publishers. … Every day, we see ad requests from more than 160 countries."

From Net Applications: "We collect data from the browsers of site visitors to our exclusive on-demand network of live stats customers.  The data is compiled from approximately 160 million visitors per month."

(Hmmm, 160 countries, 160 million visitors. … Perhaps 160 is to the Web what 40 is to the Bible, a nice round number that means "a lot.")

Look what Santa left under Amazon.com's tree this Christmas morning:

• 7 Acer netbooks
• 7 Apple MacBooks
• 4 Asus netbooks
• 2 Samsung netbooks
• 2 MSI netbooks
• 1 OLPC (One laptop per child) XO laptop
• 1 Lenova Ideapad laptop
• 1 Toshiba Satellite laptop

Can you spot the ringer on Amazon's 2008 Christmas-day list of 25 bestselling notebook computers?

You guessed it. It's those seven premium-priced Apple (AAPL) MacBooks in a shopping cart dominated by stripped-down netbooks, heavily discounted Windows notebooks and a 2-for-1 "$100" laptop.

Except for the MacBooks and one $599 Toshiba, every computer on that list sells for less than $500.

The seven MacBooks, by contrast, sell for three times as much: an average of $1,473.41, after rebates.

It's almost as if Macintosh buyers were insensitive to price, even in a recession. In fact, the best-selling Apple on that list isn't the cheapest; it's a $1,299 unibody MacBook marked down to $1,218.98. The cheapest Apple — a $999 white MacBook, marked down to $929.99 — is No. 22.

Over on Amazon's desktop bestseller list, Apple did even better this Christmas morning: 4 of the top 5 are Macs.

Amazon (AMZN) is the world's largest online retailer, but for definitive holiday sales figures we'll have to wait for the quarterly reports.

In a holiday shopping season that got off to a better start than expected, Apple (AAPL) products sold particularly well — although not as well as last year, judging from sales at Amazon, America's largest online retailer.

The iPod Touch was Amazon's No. 1 best-selling electronics item Black Friday morning. By Sunday, however, it had dropped to No. 4 after the Kindle reader, a Canon (CAJ) Powershot camera and a Garmin (GRMN) GPS navigator.

All told, three of Amazon's top 10 bestselling electronics items — and 10 of the top 25 — were made by Apple. By the end of the holiday shopping season last year, five of the top 10 were Apple's (link).

In Amazon's computer department, a $1,170 unibody MacBook was the No. 4 bestseller — after a $320 Asus EEE PC and a pair of Acer Aspires marked down to less than $400. Last Christmas Eve, the No. 1 spot was held by a white MacBook on sale for $1,219 after rebate (link). This year, the same computer selling on Amazon for $968 failed to make the top 25 bestseller list, although a more expensive model with a bigger hard drive came in at No. 13.

By Sunday, five of the top 25 computers on Amazon were MacBooks. According to Kaufman Bros. analyst Shaw Wu, Apple could have done better it had cut its prices a bit more steeply. (link) Discounts at the Apple store this year were in line with 2007, whereas price cutting among Apple's resellers was considerably more aggressive. See here.

All in all, most analysts were surprised at how well this year's Black Friday sales went off — the fatal trampling of a Long Island Wal-Mart worker and a fatal shoot-out at a California Toys "R" Us notwithstanding (link). Sales at U.S. retailers the day after Thanksgiving came in at $10.6 billion, 3% higher than last year's, according to preliminary data from ShopperTrak RCT Corp., a Chicago-based research firm (link).

Online sales were particularly strong, according to Amazon (AMZN) and eBay (EBAY).

PayPal, the online payment service owned by eBay, reported nearly 34% more transactions this year compared with Black Friday 2007. PayPal said its sales numbers reflected a 12% overall rise in U.S. e-commerce for 2008. (link).

UPDATE: Comscore (SCOR) data for the first 28 days of the holiday e-shopping showed a considerably smaller Black Friday bump. According to Comscore's Sunday press release:

"For the holiday season-to-date, $10.41 billion has been spent online, marking a 4-percent decline versus the corresponding days last year, while Black Friday saw $534 million in online spending, up 1 percent. For the combination of Thanksgiving Day and Black Friday, online sales were up 2 percent relative to last year." (link)

Apple (AAPL) by all accounts had a terrific holiday season. The Apple Stores were packed, and Macs, iPods and iPhones were shipping in record numbers. On Christmas day alone, Steve Jobs announced at Macworld last week, the company sold 20 million songs.

Then the market tanked, and Apple's shares, having more than doubled in 2007, went into free fall. As the Dow dropped 10 percent, Apple dropped more than 20 percent, from a record high of 202.96 to just over 161.36 last Friday.

This will presumably change on Tuesday, when the company reports its quarterly earnings. If nothing else, day traders are likely to load up on the stock and it options, anticipating that Apple will easily beat its projected $1.42 earnings per share on sales of $9.2 billion — guidance that was considered uncharacteristically unconservative when it was offered three months ago. The street consensus is now $1.62 EPS on $9.47 billion. Piper Jaffray's Gene Munster, always the optimist, is looking for $1.73 on $9.73 billion, and as of Jan. 14 was still calling for a price target of 250.

Even Munster doesn't expect that kind of bounce when earnings are announced after Tuesday's market close. What he and the other analysts will be tuning in for is the conference call that starts at 5 p.m. ET. (You can listen to the webcast here.) How Apple's shares behave in the weeks ahead will depend on a handful of key numbers to be revealed in that call. Here are the ones the traders who hang out at The Mac Observer's Apple Finance Board will be listening for:

• Earnings per share. Beating guidance and meeting the street consensus is a given. The traders here are whispering about $1.80 per share, and even that wouldn't equal the 73 percent year-to-year earnings growth Apple has achieved over the past four quarters. To do that, it would need $1.94 EPS.
• Forward guidance. Apple tends to be cautious when projecting future earnings, preferring to under-promise and over-deliver. But traders are abnormally sensitive these days to recession signals, and if the company's forward guidance is too conservative, it could be read as a sign that even Apple is starting to feel the pinch.
• Gross margins. As the AFB moderator who calls himself DawnTreader puts it: "Volume is nice. But high-margin volume is better." He's watching how much of each sales dollar flowed to cover operating costs and to the bottom line after manufacturing costs.
• Mac sales. This is the key to the quarter, according to Piper Jaffray's Munster. "If Apple sells 2.3 million units, it would be a significant positive," he wrote in a report to clients issued last week. "2.3 million Macs represents 43% y/y growth compared to 28% y/y in Dec-06 and 20% in Dec-05."
• Deferred revenue. I don't pretend to fully understand the significance of the tricky way Apple accounts for its iPhone and Apple TV revenue. But this is what DawnTreader says about it: "One of the most important numbers IMHO is the net pick-up in cash exclusive of deferred revenue liabilities. Net income and EPS is impacted by a number of non-cash expenses including depreciation and amortization. How much net cash exclusive of deferred revenue and other liabilities flowed to the balance sheet?" (link)

Got that? Good luck.

Reflecting strong holiday sales of both MacBooks and iPhones, Apple's (AAPL) market share grew sharply in December, as measured by a Net Applications survey released today.

The Mac hit a record 7.3% share, up from 6.8% last month. The iPhone also hit a new record, .12%, up from .09% in November. That suggests that better than 1 out of every 1,000 people on the Internet are browsing the Web using an iPhone.

Microsoft's (MSFT) Windows still dominates, with a 91.8% share as measured by the Web metrics company. But it lost ground in December, as it has for seven of the past 11 months.

The Mac OS share, by contrast, grew 7.4% in the past month, nearly double November's rate. The iPhone grew even more sharply, jumping 33% over November's numbers. Only the Playstation (.02% share) grew faster, albeit from a much smaller base.

Net Applications’ monthly surveys do not measure market share in terms of computer systems sold. Rather, they sample data from visitors to some 40,000 websites operated by the firm's clients. As such, the findings are probably better described as a snapshot of installed base taken from a less-than-random sample. But the results tend to correspond well to domestic market share as measured by more traditional market survey firms like IDC and Gartner. To see Net Application's full report, click here.

The Linux operating system also showed strong growth (up better than 10% to hit a .63% share), as did "other," a category that includes the iPod touch, Web TV and the Nintendo Wii.

The results are summarized in the table below:

Despite fierce competition from machines with more than twice the memory and price points hundreds of dollars lower, Apple's (AAPL) white 120 GB MacBook has captured the top spot on Amazon's (AMZN) list of bestselling computers this Christmas eve.

Helped along by rebates ranging from $75 to $150, three Apple-brand notebooks are on the top 10 list this morning. The other bestsellers are the 80 GB MacBook (No. 7) and the 120 GB MacBook Pro (No. 10).

Price cutting among the competition is even steeper. HP's (HPQ) 250 GB Pavilion (No. 5) is selling for $999.99, 27% off the $1,375 list price.

The least expensive computer on the list, at No. 8, is the $381 Linux-based Asus Galaxy with a 7-inch screen and 4 GB of flash memory rather than a hard drive. Many expect Steve Jobs to announce at Macworld that Apple is entering the market for flash-based notebook computes. Apple's thin MacBook, however, is likely to be larger, carry more memory, and cost a whole lot more than $381.

In Amazon's list of top-selling electronics, a late surge by a heavily discounted portable hard drive has pushed an iPod off the stack. Apple had five of the top 10 spots for much of the pre-Christmas shopping period; it's now down to four. See here.

UPDATE: As of 2 p.m. ET, the MacBook has been edged aside at No. 1 by an HP Pavillion with 160 GB hard drive marked down 37% (including rebate) to $679.99.

BOXING DAY UPDATE: This morning, the day after Christmas, the MacBook is back on top.

Online shopping is up nearly 20% this Christmas, according to comScore Inc. (see here), and electronics is one of the hottest categories, up 24% from last year. So what gadgets are Americans buying this holiday season?

Judging from Amazon's (AMZN) list of top sellers, a lot of iPods and iPod touches.

With only a couple shopping days left before Christmas, five out of the top 10 items on Amazon's "bestsellers in electronics" list are Apple (AAPL) products, including the 4 GB iPod Nano (No. 1), the 8 GB nano (No. 4), the iPod touch, (Nos. 6 and 7) and the 80 GB iPod Classic (No. 8).

Apple does even better in the "most gifted in electronics" list, with six out of the top 10.

Also selling well on Amazon are GPS navigators (No. 2, 9 and 10), the Kindle reader (No. 3, on backorder) and a Canon digital camera (No. 5).

In Amazon's computer department, the MacBook Pro and MacBook come in at No. 4 and 7, respectively, among a lot of HP (HPQ) and Asus machines.

The iPhone is not available on Amazon, but is reported to be selling briskly both here and in Europe. The rumor site 9to5Mac, citing unnamed sources, claims Apple is preparing to announce the sale of the 5 millionth iPhone next month at Macworld. That may be overly optimistic. Even as bullish an analyst as Piper Jaffray's Gene Munster doesn't expect Apple to have sold more than 3.7 million iPhones by mid January. (See Silicon Alley Insider here.)

SUNDAY UPDATE: Nearly 24 hours after this was first posted — and two days before Christmas — the list of Amazon top sellers in electronics is remarkably stable. The same five Apple products are still in the top 10. The Kindle and the Garmin nuvi 350 navigator have switched places at Nos. 2 and 3. And a Toshiba HD DVD player has moved, like a British Prime Minister, into No. 10.

CHRISTMAS EVE UPDATE: A late surge by a USB 160 GB portable hard drive from Western Digital (sale price: $99, down from $149) has pushed an iPod off Amazon's top 10 list in electronics. Apple is down to four of the 10 spots. In the computer department, however, the 120 GB MacBook has moved into the No. 1 position, a smaller MacBook has taken No. 7 and a MacBook Pro is No. 10, giving Apple Inc. three out of the top 10 bestselling computers on Amazon this Christmas eve. (See here.)