Apple's (AAPL) fiscal year, which ends Saturday, finished on a strong note.

The company won't release its earnings for a few weeks, but shareholders can already see the most visible rewards — a stock that returned gains of nearly 45% over a 12 month period in which the S&P 500 lost 15%.

The last eight months were particularly impressive. The stock climbed from a 2-year low of $78.20 a share on Jan. 20 to close Friday at $182.37 — up 133%.

The stock's roller coaster performance over the first four months were driven in part by broad economic trends and in part by concerns about Steve Jobs' health. But its recovery, I suspect, had less to do with Jobs' return than with the company's underlying strength.

Below the fold: The year's highlights (with links to Apple 2.0's coverage).

• Oct. 14, 2008: Steve Jobs introduces new MacBooks (link)
• Dec. 16, 2008: Apple announces it is pulling out of Macworld (link)
• Jan. 5, 2009: Jobs says he has a "hormone imbalance" (link)
• Jan. 6, 2009: Phil Schiller delivers Apple's last Macworld keynote (link)
• Jan. 14, 2009: Jobs takes a medical leave (link)
• Mar. 17, 2009: Apple previews iPhone 3.0 software (link)
• Apr. 23, 2009: 1 billionth iPhone app downloaded (link)
• June 8, 2009: iPhone 3GS, $99 iPhone 3G announced at WWDC (link)
• June 19, 2009: iPhone 3GS launches, 1 million sold in first weekend (link)
• June 20, 2009: Jobs' liver transplant revealed (link)
• June 29, 2009: Jobs is "back to work" (link)
• Aug. 28, 2009: Snow Leopard launched (link)
• Aug. 28, 2009: China Unicom announces deal to sell iPhones in China (link)
• Sept. 9, 2009: Jobs returns to stage, unveils new iPods (link)
• Sept. 23, 2009: FASB approves subscription accounting change (link)

"First of all," says San Francisco Chronicle sex columnist Violet Blue, in glasses, Mary Janes and peek-a-boo top, "I never knowingly slept with a Windows user. Ever."

That tells you pretty much all you need to know about MacHeads, the 2008 film now enjoying a second life at Amazon (where it's currently the No. 4 top-selling documentary) and the iTunes Store (No. 8). Both retailers recently added the film for sale and rental.

If you want to meet a lot of people who wear funny hats, stroke and kiss their personal computers, and care passionately enough about Apple (AAPL) to make sexual decisions based on what OS you're using, you've come to the right section in the video store.

A labor of love by Ron and Kobi Shely, two Israeli brothers who discovered the cult of Mac late in the game (circa 2000), the film opens with the lines at Macworld 2007 in San Francisco and closes five months later in New York City with the lines that formed the day the first iPhone went on sale.

But it's the Mac community that provides the arc — and the pathos — of the film.

There was an Apple community before 1984, but it blossomed with the "Big Brother" ad that defined the Mac culture as something separate from and hostile to IBM (IBM) and Microsoft (MSFT). According to the Shely brothers, it sustained the company during the dark "crisis" years when Apple management lost its way and it fell to the user groups — like monks in the Middle Ages — to keep the faith alive. Or maybe more like penguins, as columnist Andy Ihnatko puts it in the film, huddled together to share their body warmth.

Ultimately, this is a story of lost innocence. Even as the community celebrated the return of Steve Jobs — their prodigal son and savior — it was being undermined by the Web (which obviated the need for local user groups) and a grown-up company that no longer required a fanatical user base to achieve financial success.

"Oh Apple?" says Ty Shipman, a member of the now defunct Berkeley Mac Users Group (BMUG). "They could care less."

Apple fans will find much to love in this film. Windows users may find their prejudices confirmed.

You can rent or purchase MacHeads here. The official trailer is available here. The YouTube version of the trailer is pasted below the fold.

Where was the new iMac that Apple watchers expected Steve Jobs — or rather, Phil Schiller — to unveil at Macworld?

In a report to clients issued Monday, Kaufman Bros.' analyst Shaw Wu says it will be out before March, or June at the latest, and he offers three reasons that the refresh of Apple's best-selling desktop machine is running behind schedule. According to his latest supply chain checks:

1. Apple hasn't yet decided whether to power the new iMac with Intel quad-core processors or newer dual-core processors with larger caches. "While quad-core would provide a material improvement in performance and potentially  jump start sales," he writes, "it could cannibalize the Mac Pro, its high-end tower."
2. Apple computers tend to run hot, and the iMacs vents and cooling systems may need to be redesigned, he says, "to deal with higher heat dissipation."
3. The timing of Snow Leopard — the next-generation Mac OS X announced by Steve Jobs last June but still without a firm release date — could be an issue. "While Leopard would take advantage of multiple cores," he writes, "Snow Leopard takes it to the next level with better support for multi-core, multi-processors, and OpenCL, with enhanced graphics capability."

Wu points out what last week's earnings report made abundantly clear: Apple's desktop machines are due for an overhaul. The company's desktop business was down 25% year-to-year in the quarter that ended in December. Only boffo sales of the MacBook and MacBook Pro — up 34% — saved its Mac numbers from going south last quarter.

Wu is sticking with his Apple (AAPL) price target of $120 a share, which as he points out is 11 times free cash flow earnings for the calendar 2009, by his estimate, but only 7.5X if you exclude Apple's enviable $28.1 billion cash hoard.

David Pogue, New York Times tech columnist, creator of the Missing Manual series, and frustrated Broadway producer, led his Macworld Live! feature presentation in San Francisco Wednesday with a musical riff on Steve Jobs' non-attendance.

Playing the electric piano and accompanied by former Cirque de Soleil bassist J.F. Brisette, he sang, to the tune of Oliver's "Where is Love?"

"Where is Steve? Give us something to believe! Should we trust Apple's press release — or are we all naive?"

The performance drew knowing laughter and applause from an audience of several thousand in the basement of Moscone Center's North Hall. But the hit of 90-minute presentation were his three guests:

• Matt Harding, whose YouTube videos dancing at exotic locations around the world have been downloaded 17 million times. See, for example, Where the Hell is Matt?
• Matt Bledsoe and Tyler Hitch, creators of the You Suck at Photoshop series, downloaded 20 million times.
• Ge Wang, the creator of Ocarina, our favorite iPhone app, which not only turns the device into a 4-key musical instrument (downloaded nearly 500,000 times at 99-cents each) but lets you hear — in near real time — the music other Ocarina players are making all over the world.

Pogue, joined by Brissette on bass and Wang on iPhone Ocarina, closed the show with two more musical parodies:

• A song about iTunes to the tune of Billy Joel's "Piano Man" ("We might prefer more compatibility but Steve likes to run the whole show!")
• And a "Switcher's Anthem" to the tune of Boz Scaggs' "We're All Alone." ("Ditch your Windows, get a clue, a new cult waits for you.")

Interviewed after the performance, Pogue said that he did not intend to make light of Jobs' health problems. He believes that the real reason Apple's CEO skipped the keynote was that Jobs reviewed Apple's (AAPL) product line-up for Macworld — upgrades of iWork and iLife and a 17" laptop — and decided it wasn't worth his time. That, says Pogue, not failing health, is why Jobs had senior vice president Phil Schiller give the keynote in his stead.

The spoonerism of Phil Schiller, Pogue points out, is shill filler.

When Apple announced Tuesday that it was finally lifting the so-called digital rights management (DRM) restrictions that iTunes music customers found so onerous, it left one thing out: the cost of doing so — in money and, as we learned overnight, time.

“We are thrilled to be able to offer our iTunes customers DRM-free iTunes Plus songs in high quality audio," said Steve Jobs in a press release.

"It's really easy," said senior vice president Phil Schiller in his Macworld keynote address, "to go in and convert your entire music library" with one click.

He didn't mention that it would cost you 30 cents per song, 60 cents per music video, and 30% of the cost of an album to do it.

Leave it to Apple (AAPL) to turn the lifting of restrictions into a profit center. If users convert every one of the 6 billion songs purchased from the iTunes Store over the past six years, a rich new revenue stream will flow toward Cupertino. Techcrunch's Erick Schonfeld calls it a "$1.8 billion music tax."

Of course, not all of those 6 billion songs will be converted. Apple's DRM protection scheme made it difficult to move music from one computer to another, share it with friends or play it on a non-Apple music player, such as SanDisk's (SNDK) Sansa Fuze or Microsoft's (MSFT) Zune — restrictions that don't affect every iTunes customer.

Besides, as AppScout helpfully points out, you can still make your songs DRM-free by burning them on a disk and ripping them back into iTunes.

But the burn-and-rip process is cumbersome and wastes a lot of plastic, so we decided to try the Schiller one-click method.

The first thing we learned was that it's not quite as easy as he made it sound.

When I went to the iTunes store, the little "Upgrade My Library" button, which usually appears at the bottom of the Quick Links box in the upper right hand corner of the front page, was mysteriously missing.

It took some time to figure out why. If you have several iTunes accounts — as I do — you have to log in on the account you used to purchase your songs before you can convert them. (Note to Steve: Removing a button is not the best way to send this message to a user.)

When I finally situated myself in the proper account, the button appeared. I clicked it and held my breath. I have a lot of stuff in my music library — 4,579 songs, to be precise. Converting all that music could be prohibitively expensive.

As it turned out, the bulk of my songs had nothing to do with Apple. Most of them were copied legally from my — and my friends' — CD collections.

But 231 songs — consisting of 100 individual titles and 6 albums, according to iTunes — had been purchased from the Apple store and were eligible for conversion at a cost of $50.60.

OK. At 12:25 a.m. PST, I clicked and waited.

Seven hours later, I'm still waiting.

"Your iTunes Plus upgrade is now processing," my computer tells me. "When your iTunes Plus music is ready to begin downloading, you will receive an email with download instructions and other information about your upgrade."

Either a lot of people decided to convert their music Tuesday night, overburdening Apple's iTunes servers, or this is a more cumbersome process than I — or Phil Schiller — imagined.

UPDATE: Three days, six error messages, three phone calls to Apple, two intercessions by iTunes customer support and $109.47 later, I've successfully update all the copy-protected items in all my accounts — 473 songs and 14 albums. I think I may need a better sound system to hear the difference in audio quality.

Boring is good, says Piper Jaffray's Gene Munster in a report from Macworld 2009.

"Today's Macworld keynote was underwhelming as expected," Munster wrote in a note to clients, a development he interprets as "a sign that Steve Jobs remains primary spokesman and active leader."

The biggest news at the show, he says, was the updated 17" MacBook Pro and two software updates: iLife and iWork. (See Live from Apple's last Macworld)

That's a far cry from the kind of product Steve Jobs regularly introduced at Macworlds past, including the iBook, iTunes and the iPhone.

Always the optimist, Munster believes that the lack of any big news Tuesday actually adds clarity to the confusion surrounding Jobs' decision to skip the show.

"If Phil Schiller had made a significant announcement, we would have seen that as a sign of a changing-of-the-guard, but that was not the case. In other words, Steve Jobs remains the primary spokesperson for the company and we expect him to continue to appear at special events for all major product announcements. More importantly, this is another sign that Steve Jobs remains the active  leader of the company, in our opinion."

Munster retains a Buy rating on Apple (AAPL) with a price target of $235 a share.

This is a live blog of the valedictory keynote Steve Jobs decided not to give — sending Apple senior vice president Phil Schiller to Macworld 2009 in his place.

Schiller's remarks began shortly after 9 a.m PST (12 noon EST),

Posts are listed in reverse order, with the latest posts on top. All times are a.m. PST.

The headlines: Expectations were low, but even those were largely unmet. There was no Steve Jobs cameo, no Mac mini, no new iMac, no Snow Leopard ship date, no memory upgrades for iPhone or iPod touch, no new iPod shuffle, no revamped Apple TV or Time Capsule. There was a new unibody 17-inch MacBook Pro with an impressive (if non user-removable) battery. There are new price points for iTunes music and 10 million songs are going DRM-free, if you are willing to pay extra for them. And iWork is making collaboration on the Web a little easier, but it's still in beta and it's no Microsoft (MSFT) Office — or even Google (GOOG) Apps — killer.

As one wag put it afterward, Tony Bennett got a standing ovation. Apple, not so much.

Apple (AAPL) closed at 93.02 on Tuesday, down 1.65% for the day.

Below the fold: The live blog.

10:37 And we're done. Phil Schiller thanks his staff, his family, and invites us to enjoy the show.

10:30 Ending with live music. It's not going to be Paul McCartney. No, it's Tony Bennett on a floating stage with a 4-piece band. "The Best is Yet to Come." He gets a warm applause. "I Left My Heart in San Francisco." Standing ovation.

10:24 One last thing. iTunes. 6 billion songs sold. World's largest media library. More than 10 million songs. Over 75 million accounts with credit cards. iTunes now the No. 1 channel for music in the U.S. So what's new? Three things. First: Price. Caving in to music publishers, starting in April, three price points $.69, $99, $1.29.

Second: Reviews what iTunes Plus does. Allows DRM-free music. Starting today, offering 8 million songs DRM free. By the end of this quarter, all 10 million songs in iTunes will be DRM free. Big applause. You can go into your library and update all your songs at once. (Doesn't mention what this would cost you.)

Third: iPhone wi-fi music store. Now you can also download over 3G networks as well. (Scattered applause.) Starts today. "This is really profound," says Schiller. The audience is silent.

10:21 Schiller back. Up to 7 hours with discrete graphics, up to 8 hours with integrated graphics chip. "Just as thin. Just as light." Take-back and recycling program.

Price: $2,799 4 GB  memory. 320 GB HD. Superdrive. Ships late January. Shows the TV ad. Battery is featured.

10:10 Finally, a piece of hardware! The 17" MacBook Pro. Quotes Jobs' favorite pet journalists — Walt Mossberg, David Pogue — talking about how great the new MacBooks are.

Specs: 0.98 inches thick. 6.6 pounds. 17-inch backlit display. 60% greater color gamut than previous. Glossy finish. Also an anti-glare option for $50 extra. (Applause.) Integrated battery connector. (Does "integrated" mean non removable?) 2.93 GHz. up to 8 GB memory. Both NVIDIA graphics options. 320 GB Hard drive. 256 GB Solid state.

Gets to the battery. Longest lasting battery life ever, but notebook just as thin and just as light. Clips Bob Mansfield. Up to 8 hours. More environmentally friendly. Dan Riccio. Made it bigger. Removable batteries waste a lot of space. By making it nonremovable, able to make it 40% bigger. Mansfield: Custom-designed. Unnamed chief engineer shows a manufacturing movie. Mansfield: adaptive charger. Up to 1000 recharges, more than 3X the old way. Chip within the battery that talks to each of the cells and adjusts accordingly. Claims 3X the lifespan. Mansfield: Greener. Free of "many of the harmful toxins." Lifespan extended to up to 5 years.

10:03. iWork.com. As predicted, its been updated to be more Web friendly. Allows people to collaborate on documents that are shared on the Internet. But — and here's a piece of news — it's still in beta. Demo: Hit a button and it alerts a collaborator — Tia — that a document you want to share that the document is available for viewing on iWork.com. Tia gets e-mail invited to view document. Launches her browser (Mac or PC) and she sees the document. She can read, leave a note or comment, and, if she wants to edit it, she has to download it. (This is less than expected. In Google's tools, collaborators can actually edit the document online.) Launches today. Eventually Apple will sell it; today it's free

9:59 Numbers '09. Table categories. Categorize by column — by baseball position rather than player name, for example. More functions — more than 250 now — that pastes into your spreadsheet with color-coded variables. New chart types. Trend lines, error bars. (More candy for the biz guys.) Links to Pages so that an update in a spreadsheet gets updated in your word processing document. And, naturally, more "beautiful new templates." $49 with new Mac, $79 otherwise. $99 family pack. Starts shipping today. You need Leopard to run these, but a box set that includes all three comes for $169.

9:55 Pages '09. Full screen view to focus on your writing and get rid of everything else on your desktop. Dynamic outlines. See your document in outline view, reorganize your sections. Mail merge with Numbers. Mathtype and Endnote. 40 new templates. Business cards etc.  Is this what Apple has been doing with its time?

[Will we never get any new hardware?]

9:49 No 2. A new version of iWork. Starts with Keynote. Magic Move, a transition between slides. Object transitions. Text transitions. Bush swings into Obama. (Applause, laughs.) Chart animations. Crane move in a bar graph. Etched metal. Stone texture. Zoom through wood texture pie chart. (Going after the business market, are we?) Themes. (Does anybody actually use these?) Keynote remote to run on your iPhone or iPod touch so you can control your slideshow with your iPhone, flicking between slides with swipe of your finger. Selling on iTunes App Store for $.99.

9:48 iLife 09 ships free with new Macs, upgrade for $79, shipping late January.

9:41 Schiller back on stage. To talk about Garage Band '09. Added new feature called "learn to play." Guitar or keyboards. Instructor up above, guitar in the middle, controls on the bottom. Plays a snippet. 12-bar blues in key of A. Chords A, D and E. Another snippet from keyboard: Hearts and Minds. Free: 9 lessons for guitar, 9 for piano. Also, Artists Lessons. John Fogerty. Colbie Caillat. Patrick Stump. Sting. Sarah McLachlan. Ryan Tedder. Norah Jones. Promises to add more along the way. $4.99 a lesson. Clip: Fogerty. "It was early 1968, the best as I can remember it…" (Audience laughs). Proud Mary, it turns out, was inspired by Beethoven's Fifth.

9:31 iMovie demo by Randy Ubillos. Inserts video clip with lots of options. Selects some sound from another clip. Drops audio only into other video. (The audience loves this.) Tightens up action and adjusts an edit on the fly. Gets a finished shot of a boy jumping in a lake from two different angles, with clean audio from only one shot. (Applause.)  New project: Safari. Shot from a jeep smoothed out using video stabilization. (Oooh.) Makes a gazelle pop out of the background. Slows a leopard down. Cartoon effects. X-ray effect. Aged film, complete with fake scratches. Adds maps with start and end locations. Get cool animated map with a red line zooming across the globe like the old Warner Bros. cartoons. Themes: five of them. Comic book, Scrap book, Film strip, Photo album and one more. ("Directed by Phil Schiller" gets a laugh.) Finished movie gets a big applause.

9:28 New version of iMovie. (Strangely muted response to that one.) Reminds us that iMovie was completely revamped last year, drawing complaints about some missing features. What's in it? New editing feature. New drag and drop feature. Context sensitive menus. Dynamic themes with titles, transitions, effects. Maps showing where you traveled. Video stabilization. (The audience has gone silent.) So he goes to a demo. Invites Randy Ubillos to the stage to do it. Big applause.

9:24 Now he's doing a demo of places. Adding locations to all his events. Seeing pins of every photo taken during a trip to Paris, up and down the Seine. Column view that lists all the photos of every picture he's taken in the world. All the U.S. photos. All the Calif. photos. All the Arc de Triumph photos.

9:21 Schiller begins a demo. Recognizing faces, confirming names, zooming in on the faces (applause.) Makes a smart albums of a whole family. That's faces.

9:19. Books from iPhoto. Travel theme with maps that includes geotagging info and pins on that page to show where photo was taking.You can also print on the sleeve and the hardcover.

9:17 Slideshow things. Assign music to your slideshow, pick themes from Apple's Muzak library. (My wife will hate this.) Slideshow somehow centers your faces. Demos some wacky transitions. Can save slideshow, complete with bad music and wacky transitions to your iPhone.

9:15 Also added to iPhoto: support for Facebook and Flickr. Tags the faces. Click facebook button and it sends the photo to Facebook with nametags. Your friends can then add the names of the faces you didn't know and the names get synched to your iPhoto. Flickr sharing works as you would expect. Includes geotagging.

9:11 Another new iPhoto feature: Places. Open and get a map with pins wherever your photos were taken using geotagging (if your camera has it; the iPhone does). Take a photo, geotag with longitude and latitude is added to your photo. Reverse encodes and determines that it's at, say the Eiffel Tower in Paris, France. If you don't have a geotag camera, you can add the event location to a photo file. iPhoto then assigns a geotag to every photo in that Event. The maps comes from Google Maps. So you can zoom to street level. You can click on the pin and see street map, satellite image.

9:08. New version of iPhoto. Talks about Events, the feature added last year. This year, adding to events: Faces. Really powerful. Wouldn't it be great to allow you to organize your photos around your people. Corkboard with snaps of your people using face detection. Click on picture, name this person, face detect finds the face. Then the program tracks that person using face recognition to find the same person across multiple photos. You confirm or don't. Not perfect, but the best technology we've found.

9:07 Three new things to tell you about. First: an entire new version of iLife, iLife 09.

9:05 Today I'm going to talk about the Mac. 9.7 million sold last year, grew 2 x faster than rest of industry.

9:05 Stats. 3.4 million people visit Apple stores every week. 100 Macworlds every week.

9:04 Appreciates us showing up. "Incredibly exciting time at Apple." Photos of stores in Beijing, China; Munich, Germany; Sydney, Australia.

9:03 The lights dim. The music stops. Phil Schiller takes the stage.

9:00 The music swells … nothing.

8:59 Silence your cell phones.

8:56 OK, the room is filling up, although there are still large expanses of open seating.

8:40 The doors are open and the crowd, such as it is, files in. A lot of empty seats. My row is empty.

8:31 The media, however, are out in force, preening and strutting. Or maybe more like sharks who smell blood in the water.

8:24 The ground floor is nearly empty.

8:21 With less than 40 minutes to go to showtime, the entrance to Moscone West is strangely quiet.

7:55   Toni Sacconaghi, the Bernstein Research analyst whom investors love to hate, has issued a long report to clients this morning on the potential of an Apple TV box equipped with Tru2way cable TV, lending partial credence to Macworld Rumor No. 2. (See here.)

7:45  Analysis of Jobs' health letter, which dominated the Techmeme news aggregator Monday (see here), has all but fallen off its front page. Oppenheimer & Co., which had withheld its price estimate three weeks ago, has reinstated the stock — for now. See here.

7:30  The online Apple Store, as it is wont to do in advance of a product announcement — any product announcement — is closed for updating.

Meanwhile, for background reading, check out:

• Top 10 Macworld rumors for 2009
• Hoping for a Steve Jobs surprise
• What's going on with Steve's hormones?
• What's Macworld without its 'living legend'?
• Behind Steve Jobs' Macworld exit

[Photo courtesy of setteB.IT.]

Oppenheimer & Co.'s Yair Reiner turned heads on Wall Street three weeks ago — in the wake of Apple's surprise announcement that Steve Jobs would be skipping Macworld 2009 — when the analyst downgraded the company and refused to set a price target for its shares until he got some answers. (See Analyst sounds warning.)

On Tuesday, Reiner reinstated Apple (AAPL), upgrading the stock to "outperform" and setting a 12 – 18 month price target of $135 a share. (The stock closed Monday at $94.58, up 4.22% for the day.)

But in a long note to clients, Reiner made it clear that while Jobs' open letter Monday offered some reassurance, he remains skeptical.

"We don't know what ails Apple's CEO, and we're not ready to assume that a problem with a 'relatively simple and straightforward' remedy is a problem that is itself 'simple and straightforward.' Still, it seems unlikely that Jobs, the board, and its counsel would disclose the prognosis of a six-month recovery if it were at odds with doctors' expectations."

Reiner describes Jobs' note — and the board's accompanying statement — as an "attempt to balance the protection of Jobs' privacy with the board's fiduciary responsibility to disclose significant risk factors to the company."

Apple's lawyers must have vetted the letters with care, he says, so it's incumbent on investors "to parse the missives with equal care."

In Reiner's parsing, the letters say that the board considers the risk to Jobs' health to be "grave" — or in SEC parlance, "material" — although Jobs leaves the strong impression that the most likely outcome is a return to relatively normal health.

At the least, Reiner writes, the prognosis of a six-month recovery buys Apple some time. "'The Apple community' is now due an update in late spring, but until then the recovery will be allowed to run its course without undue prying."

Meanwhile, however, Reiner has a long list of things we still don't know, among them:

• Whether Jobs is currently engaging in his normal CEO duties
• What suddenly prompted him to seek out the root cause of his condition a few weeks ago
• What the long-term prognosis of his condition is.

In short, Reiner concludes, the leadership risk has not gone away, but it has become less acute, allowing investors to refocus on what he calls the heart of the Apple story:

• The Mac share gains
• The iPhone revolution
• The cash in the bank
• And the cash that's still flowing.

For more on Jobs' medical condition, see What's going on with Steve Jobs' hormones

At last year's Macworld, Jobs introduced the Macbook Air – and speculation about his health intensified. Photo: Jon Fortt

Under Steve Jobs, ninja-like discipline has been the hallmark of Apple's communication strategy. He has guarded the details of the company's product launches so jealously that even some Apple executives don't know exactly what he will unveil next. So with Macworld just hours away, it is just plain weird to see the ailing Maestro losing control of his message.

But it's not exactly surprising. The key ingredient in Apple's (AAPL) message has long been Jobs himself. Since he retook the helm of Apple more than a decade ago, Jobs has positioned himself as supreme leader and chief marketer. He has guided every important product, explained every major strategy, and ensured that everyone knew he was the one calling the shots. In the process, Jobs promoted the idea that he and Apple are one and the same: to believe in Apple is to believe in Steve Jobs. This worked beautifully when Jobs was using his considerable celebrity to draw attention to the iMac, iPod, iPhone, and various other i-hits. Today, though, the Jobs obsession he created is taking attention away from the stuff that makes Apple money – its products – and doing so at a very inconvenient time.

Instead of anticipating the goodies Apple will unveil at today's widely-covered Macworld show in San Francisco, fans have been guessing why Jobs decided to skip the event altogether. At first, Apple insisted that Jobs' health had little to do with it – he opted out of his annual address for "political" reasons, the company claimed. But on Monday Jobs finally fessed up, saying in an open letter than he is undergoing treatment for a hormone imbalance that he believes has been causing him to lose weight for about a year. "The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment. But, just like I didn’t lose this much weight and body mass in a week or a month, my doctors expect it will take me until late this Spring to regain it. I will continue as Apple’s C.E.O. during my recovery," he wrote. "So now I’ve said more than I wanted to say, and all that I am going to say, about this."

If only it were that simple. Now that Jobs is sick and wants to be left alone, he might regret creating this cult of personality, but it's too late. Because Jobs has equated himself with Apple for all these years and built the company's marketing strategy on his own persona, it's unlikely that we've seen the end of this story. If he hasn't gained some weight by springtime, as his letter suggests he should with therapy, people will speculate about whether it's a hormone problem after all, and analysts will rightly expect an update during Apple's April and July conference calls. And all the while, there will be a considerable appetite for Steve Jobs health news, and for good reason: investors have billions of dollars riding on Apple's success, and Apple as we know it simply can't exist without Steve Jobs.

A lot of people disagree with that notion, by pointing out that Jobs has assembled a team of smart lieutenants who should be able to steer the company in his absence. This is true – to a point. The reality is that aside from Jobs, Apple's management team is stocked with role players. Operations chief Tim Cook is a logistics genius, but he hasn't displayed a knack for marketing. Meanwhile marketing chief Phil Schiller is no design expert, design chief Jony Ive probably couldn't lead the retail strategy, and so on, and so on. A great team, sure, but a bit like the old Chicago Bulls without Jordan.

None of this is a problem as long as Jobs is in place as the unquestioned leader who makes big decisions and handles the board of directors. Under his direction, Apple has earned a reputation for quickly developing bold products without getting endlessly mired in debate. But when Jobs goes away, then what? Will all of these smart Apple executives and board members simply line up behind Cook? Schiller? Ive? Probably not.

Without Jobs, Apple still has a lot of brilliant people, but lacks a unifying figure to march them all in a single direction. (If you've ever wondered what ails Microsoft (MSFT), this is it.) That's why Jobs's health matters a lot more than any Macworld keynote, and why Apple PR's half-truths and obfuscations are only making things worse.

So what should Apple do? How about this: Tackle the ongoing Jobs health saga head on by giving updates on his progress every quarter until he recovers or resigns. Otherwise the lack of information will continue to create a market for gossip, and will continue steal the limelight from Apple's products – a distraction the company can scarcely afford in a historic recession.

Of course, this level of disclosure isn't ideal. Anyone in Jobs's position would want privacy, and no one can blame him for trying to protect it. But Steve Jobs has spent years taking the stage and claiming the spotlight at events like Macworld, making himself too important for the world to ignore. For better or worse, he has succeeded.

Steve Jobs' letter to the Apple community about his health problems seems to have reassured investors — the stock closed up 4.22% in Monday trading.

But medically, Apple's (AAPL) CEO raised more questions than he answered.

His eight paragraph message contains remarkably few health-related facts. They're all contained in these three graphs:

"As many of you know, I have been losing weight throughout 2008. The reason has been a mystery to me and my doctors. A few weeks ago, I decided that getting to the root cause of this and reversing it needed to become my #1 priority.

Fortunately, after further testing, my doctors think they have found the cause — a hormone imbalance that has been 'robbing' me of the proteins my body needs to be healthy. Sophisticated blood tests have confirmed this diagnosis.

The remedy for this nutritional problem is relatively simple and straightforward, and I've already begun treatment. But, just like I didn't lose this much weight and body mass in a week or a month, my doctors expect it will take me until late this Spring to regain it. I will continue as Apple's CEO during my recovery." (link)

"Cryptic," is how Dr. William Sherman, a medical oncologist at the Pancreas Center of New York Presbyterian and Columbia University, described Jobs' breezy summary of his medical condition. "Delightfully vague," says Dr. Andrew Ko, a medical oncologist at the University of California-San Francisco. That phrase — "hormone imbalance" — tells us neither what hormones are involved nor why they're misbehaving.

Moreover, Jobs, who is 53, has left several relevant facts out of this account, starting with the malignant tumor that was removed from his pancreas in 2004 — along with his gallbladder, part of his stomach, the lower half of his bile duct and part of his small intestine. See the Whipple procedure diagram below. The details of this operation were first reported by Peter Elkind in Fortune. (See also Why does Steve Jobs look so thin?)

Several experts, none of whom are involved in his treatment, have speculated that the hormone imbalance Jobs describes may be caused by a recurrence of the original cancer — an islet cell neuroendocrine tumor, one of the few forms of pancreatic cancer that can be successfully treated. If Jobs' first surgery missed some of those cancer cells, that's not necessarily a death sentence, says Dr. Ko. With proper treatment — using injectable drugs designed to block key hormone receptors — patients with these cancers can live for years.

Jobs told Apple employees four years ago that his cancer was "cured." And last year, according to a report in the New York Times, he told several associates — including members of Apple's board — that he was cancer-free. (See here.) He letter Monday said nothing about cancer, one way or the other.

According to the New York Times, Jobs also told the board that he had a second surgery in 2008 — most likely a surgical "revision" or rearrangement of his internal plumbing to address complications stemming from the original procedure (see here.) The purpose of this second procedure, according to the Times, was to correct ongoing digestive difficulties.

Jobs' open letter suggests that those digestive difficulties have continue to plague him and offers a new theory — confirmed, he says, by sophisticated blood tests — about what might be going on: an easily treated "hormone imbalance."

There are several problems with this explanation. Not only is it frustratingly imprecise, but it suggests that Jobs' hormone issues are something his doctors only just discovered — prompted by his decision a few weeks ago to finally get to the root cause of his weight loss.

Hormones — a broad term for any chemical released by cells that affects cells in other parts of the body — perform a wide variety of functions, from stimulating growth and regulating mood to triggering physical changes like puberty and menopause. They interact in complex ways — through cascading reactions and elaborate feedback loops — and are known to get out of whack now and then, most familiarly in post-menopausal women.

Hormones also regulate digestion and metabolism. In fact, the main function of the pancreas is to produce metabolic hormones (chiefly insulin and glucagon) and digestive enzymes that break down food. Given that Jobs lost a large portion of his pancreas in his 2004 surgery, one would expect his digestive enzymes to be affected — a condition that can be effectively treated with enzyme replacement therapy.  Hormone deficiencies are also common after a Whipple procedure, but they are usually detected and treated early. The mystery, says UCSF's Dr. Ko, is what — besides a tumor — could cause a hormone imbalance this late in the game.

“If someone is losing weight, you do a workup of his pancreas, you do a workup for diabetes, a workup for hyperthyroidism,” says Columbia's Dr. Sherman. “Maybe it wasn’t abnormal enough to say so at first, and maybe now it is so a diagnosis can be made.”

What strains credibility — and sounds too good to be the whole story — is that the issue was first raised and the cause discovered only a few weeks ago. If it is something as simple and straightforward as a nutritional problem caused by a hormone imbalance, says Dr. Ko, "I doubt his doctors would have missed it all this time."

What seems more likely is that Jobs, a man who knows something about controlling the message, is telling us a story as carefully crafted as any Apple product. He has said as little as possible about his medical condition — just enough to calm the waters roiled by his decision to skip this week's Macworld. And he said it before the markets opened on the eve of Apple's last Expo — just in time to allow the thousands of reporters, analysts, developers and fans descending on San Francisco to "relax," as he writes, "and enjoy the show."

What's really going on, we still don't know.

–With reporting by Alyssa Abkowitz.

[Diagram courtesy of the Mayo Clinic]