Philip Elmer-DeWitt will be taking a vacation break in August, filing items only when time and overseas Wi-Fi access allow between now and Aug. 25.

Because comments left on the blog require approval, there may be a longer delay than usual before they are posted. Thanks for your patience.

The number of offerings on the App Store — the venue for independently produced programs that helps distinguish Apple’s smartphone from all others — hit 1,001 on Monday night.

That’s roughly double the number that were available when the store opened just over two weeks ago (on July 11, the same day the iPhone 3G went on sale), and includes popular games like Texas Hold’em and Crash Bandicoot, business tools like Bloomberg News and Salesforce Mobile, and social networking programs like Facebook, MySpace and AIM. Roughly 20% of the apps are free; 90% cost $10 or less. Most also work on the iPod touch.

Many consider this flood of software to be a bigger deal than the phone itself. Among smartphones, only the RIM (RIMM) Blackberry has created a comparable platform for so-called third-party programs (see its application store here), but because the Blackberry lacks a touch screen and accelerometer, its apps don’t compare with the iPhone’s in terms of features and ease of use. [Several readers note that Microsoft's (MSFT) Windows Mobile and the Palm (PALM) OS also provide rich software platforms. You can view their offerings here and here, respectively.]

How you feel about Apple’s App Store seems to depend on what side of the virtual counter you stand.

MG Siegler, speaking for many App Store customers, declared it “simply sublime” in his Venture Beat column and described it as a new paradigm that would transform Apple as a company. “With each passing day I’m finding myself becoming addicted to it in the same way I was once addicted to the iTunes music store.” (link)

On the developer side, however, tempers are becoming increasingly frayed. The programmers who raced to create applications — hoping to be the first in their particular category — complain that Apple isn’t approving their submissions fast enough and that when their apps do get OK’d, they’re not getting promoted on the store’s New, What’s Hot or Staff Favorites sections or updated quickly enough. New versions sit in the queue at Apple for up to a week, leaving users to wrestle with bugs that have already been fixed. “If an update does make it into the store,” writes David Chartier in an Ars Technica article that summarizes the litany of developer complaints, “iTunes isn’t always listing the correct version. NetNewsWire, for example, is actually at version 1.0.7, but the App Store says only 1.0.1.”

But the programmers’ biggest gripe is the gag order imposed by Apple’s so-called NDA (nondisclosure agreement), which prevents developers from talking to the press, to the public and even among themselves about their programs and the SDK (software developers kit) they use to write them.

This can have real repercussions. Erica Sadun, author of “The iPhone Developers Cookbook,” (Addison-Wesley), has had to delay publication rather than risk running afoul of Apple’s legal team.  “[My publisher has] advance orders,” she told Ars Technica, “they have commitments.”

A “very polite petition” asking Apple to lift the NDA had drawn a couple hundred signatures as of Monday night. By then, a Web site called “[expletive deleted] NDA,” which keeps track of every time that phrase is uttered on Twitter, had collected 15,000 hits.

On Sunday, July 13, Apple (AAPL) issued a press release announcing that 10 million apps had been downloaded from the App Store in its first three days; by July 21, that number had risen to 25 million.

“The App Store is a grand slam,” said Steve Jobs. “Developers have created some extraordinary applications, and the App Store can wirelessly deliver them to every iPhone and iPod touch user instantly.”

Apple has not yet marked the 1,000 application milestone — or responded publicly to the developer complaints.

Joe Nocera buried his lead.

The New York Times columnist — and former Fortune editor — waited until the end of Saturday’s 1,700-word “Talking Business” column about the health of Apple’s CEO and the secrecy that surrounds it to reveal that on Thursday afternoon, several hours after he’d gotten his final “Steve’s health is a private matter” from Apple’s public relations machine, he got a call from Steve Jobs himself.

“This is Steve Jobs,” he began. “You think I’m an arrogant [expletive] who thinks he’s above the law, and I think you’re a slime bucket who gets most of his facts wrong.”

Jobs, according to Nocera, said he would share some details about the health condition that made him to look so thin and haggard at his last public appearace — and triggered two share-punishing rounds of speculation on Wall Street — if Nocera agreed to keep the conversation off the record.

Nocera agreed, and reported only that nothing Jobs told him …

“contradicted the reporting that [Times reporter] John Markoff and I did this week. While his health problems amounted to a good deal more than ‘a common bug,’ they weren’t life-threatening and he doesn’t have a recurrence of cancer.”

The “common bug” is a reference to the explanation for Jobs’ weight loss that Apple’s PR department put out in June — an explanation that Nocera feels fell somewhat short of the truth. Markoff reported on Wednesday that Jobs had had an unnamed surgical procedure earlier this year related to his loss of weight, and Nocera adds that he had learned that Jobs was having ongoing digestive difficulties stemming from the cancer surgery he had four years ago — the details of which were first reported by Fortune (see here).

All this leads Nocera to the broader point he wants to make about Apple:

“Apple simply can’t be trusted to tell truth about its chief executive. Under Mr. Jobs, Apple has created a culture of secrecy that has served it well in many ways — the speculation over which products Apple will unveil at the annual MacWorld conference has been one of the company’s best marketing tools. But that same culture poisons its corporate governance. Apple tells analysts far less about its operations than most companies do. It turns low-level decisions into state secrets. Directors are often left out of the loop. And it dissembles with impunity.” (link)

So, yes, Nocera thinks Steve Jobs is an arrogant [expletive] who thinks he’s above the law.

But Jobs may have the last laugh. Twice in his column, Nocera refers to things that happened during Apple’s (AAPL) third quarter conference call on Tuesday afternoon.

In fact, the conference call happened on Monday.

UPDATE: The error in the printed edition of the paper has been corrected in the online version.

Steve Jobs is not a manager who suffers fools, gladly or otherwise. In the early days of Apple, he was famous for categorizing employees by their “bozo bit,” set at either 0 or 1, and for flipping his assessment from one to the other in the space of an elevator ride.

So what’s he going to do about whoever is in charge of MobileMe?

For readers who haven’t been losing e-mail, screwing up syncs, tracking the MobileMe discussion boards (96,000 messages as of Friday morning, more than 340,000 views) or reading the reviews (Walt Mossberg at the Wall Street Journal gave it a rare “can’t recommend,” David Pogue at the New York Times escalated it to “the real problem is how Apple is responding”), suffice it to say that MobileMe, which went more or less live on July 10, is Apple’s worst product launch in the 10 years since Jobs returned from exile.

In Apple’s defense, MobileMe is an ambitious project — promising cloud computing and enterprise-quality syncing of e-mail, contacts and calendar appointments to millions of users for $99 a year. After a sputtering start (accompanied by a formal apology and a 30-day free subscription extension) parts of it are working moderately well. MacWorld, in the most exhaustive review yet, gave it three and half mice out of five.

But the five or six hours I lost e-mail contact with the world this week were bad enough; I can’t imagine what it’s been like for the estimated 20,000 loyal Apple customers who paid their $99 (or $149 for a family pack) and haven’t had e-mail service for more than a week.

Apple (AAPL) has not said which of its managers was in charge of the development of MobileMe, who chose that unfortunate name, or who decided to launch it at the same time the rest of the company was busy trying to get iPhone 2.0, the App Store, and the iPhone 3G out the door.

At the World Wide Developers Conference in June, it was Phil Schiller, Apple’s senior vice president for product marketing, who demoed it, leaving the strong impression that MobileMe would “push” contact and calendar changes nearly instantaneously from Mac to iPhone to PC and back — an impression that Apple was forced to correct last week. And it was Steve Jobs himself who called it “Exchange for the rest of us,” as if MobileMe could match the performance of Microsoft’s (MSFT) competing product. The company’s retail sales staff has since been instructed to stop using that phrase.

It’s more than likely heads will roll over this botched roll-out — if they haven’t already. But given Jobs’ well-documented propensity for micromanagement, it’s also possible that he was warned that the product wasn’t ready for primetime and wouldn’t take “no” for an answer.

If that’s the case, the blame for MobileMe may be his.

The barricades are still in place outside the glass cube of Apple’s (AAPL) flagship store on Fifth Avenue, and the line of customers still snakes down to 58th Street.

To the amazement of Apple staffers handling the crowd, hundreds of shoppers were lined up Thursday afternoon for a chance to buy  an iPhone 3G - 14 days after it first went on sale.

“I thought by now everybody who wanted one would have bought it,” said a clerk in an orange Apple T-shirt, as he processed transactions for Macs, iPods and various accessories. Customers not buying iPhones moved freely in and out of the store. The people in the iPhone queue waited patiently for a signal from security that it was their turn to shuffle in.

The last person in line, a young man in earbuds who had just arrived, said he’d heard there was a five hour wait but was pretty sure it wouldn’t take him that long.

At the head of the line was a young woman from Poland. No, she quickly added, she didn’t come just for the iPhone. But she had been standing in line for four and half hours.

After suffering severe product shortages — and frustrating untold numbers of would-be buyers — Apple by fits and starts seems to be getting its iPhone 3G supplies in order.

Thanks to a pair of free tools that have emerged to take advantage of Apple’s raw data feed of store-by-store availability, we’re getting a much better picture of the company’s supply and distribution problems than is afforded by the availability widget on Apple’s website.

The first is Chris Barnes’s real-time iPhone 3G Store Availability tool, which dips into the data feed every 15 minutes and displays all the information on one page — rather than breaking it up into state-by-state reports as Apple does. That way you can see at a glance that, as of Thursday 6:30 a.m. EDT, for example, the 16GB White iPhone 3G was in stock in 97 of 188 Apple stores in the United States, or 52% of all company shops.

[UPDATE: Apple seems to be having trouble with its data stream. As of Friday 7:00 a.m. EDT, its own widget showed no iPhones available anywhere in the United States. Barnes' TopMuffin site, using data updated at 3:53 a.m., reported that there are iPhones -- at least white ones -- in stock in most states.]

The second tool is a series of fever charts published by Sean Harding on his personal blog here. We’ve posted several examples below the fold. When the data are arrayed to show availability over time, some interesting patterns emerge. For one thing, you can clearly see where the iPhone supply nearly flatlined on July 20, when only three Apple stores in the United States had any in stock (see Comic relief: The world is out of iPhones!).

You can also see how supply varies during the day, as stores run out of units one by one, and then spikes in the morning as the stock is replenished. On Wednesday morning, for example, the percentage of Apple stores with iPhones in stock reached 80%, although by the end of the day it was down to just over 50%.

The charts also suggest that the black 8GB model is the most popular and the white 16GB the least — although that assumes that Apple (AAPL) is manufacturing the three varieties in roughly equal numbers.

Below the fold, as promised, Harding’s most recent charts.

Steve Jobs’ health is in the news — again. Apple isn’t talking — again. And investors are freaking out — again.

So now’s probably a good time to remind ourselves what we know, and don’t know, about the health of Apple’s CEO.

In 2003 Jobs learned that he had a malignant tumor in his pancreas — a large gland behind the stomach that supplies the body with insulin and digestive enzymes. The most common type of pancreatic cancer — adenocarcinoma — carries a life expectancy of about a year. Jobs was lucky; he had an extremely rare form called an islet cell neuroendocrine tumor that can be treated surgically, without radiation or chemotherapy.

On July 31, 2004,  Steve Jobs underwent a modified Whipple procedure — or pancreatoduodenectomy — that removed large parts of his digestive system and reassembled the remaining parts in a new configuration.

Patients undergoing the procedure typically lose up to 10% of their body weight and may suffer digestive problems for the rest of their lives.

The nature of the surgery was first reported in general terms by Fortune investigative reporter Peter Elkind in a March 5 cover story, (“The trouble with Steve Jobs”) and in some detail on this site on June 13 (”Why does Steve Jobs look so thin“).

It is possible that Jobs’ cancer has returned; that fear, and Apple’s reluctance to discuss the matter during its quarterly earnings conference call this week, helped drive Apple (AAPL) share prices down more than 10% in after-hours trading Monday. Apple shares recovered most of the lost territory on Tuesday and were trading higher again Wednesday, after investors calmed down enough to take a second look at Apple’s record third-quarter earnings.

The fact is, the effects of the Whipple procedure are probably sufficient to explain Jobs’ weight loss, without assuming any recurrence of the original cancer. Wednesday’s New York Times reports that Jobs has assured friends that he remains cancer-free, and that he underwent a second operation earlier this year to address a problem that was contributing to a loss of weight. (One hedge fund hired a private detective to tail Jobs four years ago on his way to hospital appointments to determine out how sick he might be, according to a Wall Street Journal report, and some hedge fund managers are talking about hiring private eyes again.)

Apple insists that Steve Jobs’ health is a “private matter.” But it’s also a matter of public record. Jobs has publicly discussed his bout with cancer, both in a memo to his staff and — quite movingly — in a commencement speech to Stanford University’s class of 2005 (see here).

Apple and Steve Jobs may be forgiven their reluctance to delve deeper into the details of his digestive issues. But a little disclosure on that front might go a long way to calming Wall Street’s rattled nerves.

The biggest mystery to come out of Apple’s Q3 earnings conference call Monday — besides the state of Steve Jobs’ health — was the “future product transition” that CFO Peter Oppenheimer mentioned as one of the three reasons he expects the company’s gross margins to fall from 34.1% to 31.5% over the next three months.

For a company that doesn’t talk about future products, Apple spent a lot of time Monday talking about this one. Oppenheimer mentioned this product transition at least four times during the call, hinting at “state-of-the-art products at pricepoints our competitors can’t match” and adding coyly — and illogically — that he couldn’t talk about it.

So, of course, that set off a round of overnight speculation. See, for example, here.

Could it be a revamped Apple TV? No, that’s a product that sells in numbers too small to account for the hundreds of millions of dollars it takes to do that kind of damage to Apple’s gross margins.

Could it be the long-awaited tablet Mac? No, that would be a new product, not a product transition.

Could it be a revamped iPod line, with iPod touch-like controls and solid state drives to replace the old hard drives? That’s more likely. After all, Oppenheimer warned of the same kind of product transition costs at this time last year, and what came out of it was the iPod touch.

Could it have something to do with the MacBook line? That’s what Piper Jaffray’s Gene Munster suggested in a note to clients Tuesday morning. Overhauls of the MacBook and MacBook Pro are overdue, he pointed out, and delivering them just before school starts — perhaps at prices starting at $999 — would make a lot of sense.

On the other hand, Apple (AAPL) is a company that thrives on dropping hints and then clamming up, letting fevered speculation do the work of softening up the market.

Maybe that’s what Peter Oppenheimer — taking a lesson from his CEO — was really up to.

This was a live blog from Apple’s (AAPL) third quarter 2008 earnings call, posted in reverse order with the newest entries on top. The call is scheduled to be replayed starting at about 8 p.m. ET Monday at the following numbers: (888) 203-1112 (toll free) or (719) 457-0820. Confirmation code: 4120259. A transcript is available here.

6:00 p.m. We’re done. The headline: Led by record Mac sales, earnings were up 31% to $1.19 a share for the quarter on revenue of $7.46 billion, handily beating both guidance and the average of analysts’ expectations. The quote that will catch the eyes of investors in the Q&A was the answer to the question about Steve Jobs’ health.

“Steve loves Apple,” CFO Peter Oppenheimer replied. “He serves as the CEO at the pleasure of Apple’s board and has no plans to leave Apple. Steve’s health is a private matter.”

5:15 p.m. Q&A starts. First question is about future product transition and its effect on revenue growth.

A: Reiterates revenue expectations. Hints again about that product transition he can’t talk about. (Revamped MacBook line?) Q: Asks for additional color (jargon alert!) on overseas sales. Tim Cook points to faster growth in Japan, in Asia Pacific - 53% for Mac in Asia, for example, two-to-three times the market average. European growth was more like five times industry average. France, Germany and Australia grew more than 50%  (this is all Mac sales, I believe).

Q: More store opening in ‘09? Peter Oppenheimer ducks question.

Q: Richard Gardner: How many Best Buy stores? Below target range for Mac inventory? Tim: We added 170 Best Buy stores across the quarter. Plan to be at 670 end of summer. On inventory, still trying to hit target.

Q: Ben Reitzes: Gross margins? Effect of commodity prices or back to school sales? Peter: In June, 180 basis points better than guidance. Primarily driven by better commodity market. In September 31.5 GM because of 1) School promotions 2) Future product can’t discuss (again) 3) Something about how a complicated deal with suppliers was good for Apple last quarter but won’t repeat in this quarter. Tim: DRAM entering stronger demand and we believe prices will go up. Hard drives etc. are in balance.

Peter: For future gross margins: we’re not looking for a margin so high that it creates an “umbrella” for competitors to sneak in and steal market from Apple. Beyond September, expect gross margins about 30% in 2009.

Q: What about Steve’s health? Sorry to ask, but would you address? Peter: Steve loves Apple. He serves as the CEO at the pleasure of Apple’s board and has no plans to leave Apple. Steve’s health is a private matter. (That’s not an answer that will reassure investors.)

Q: Apple TV: Number of video rentals? Tim: Pleased with sales, but remains a hobby because business not nearly as large as those others. (Ducks question).

Q: Charles Wolf: iPod sales in the U.S. vs. International? Peter: iPod sales grew 10% in U.S. and 15% outside. (i.e. You do the math.)

Q: Gene Munster: iPhone good launch. Out of product.  When will channel refill? Tim: Pleased with production ramp. Shipping as fast as we can. Confident enough that we will be launching 20 additional countries on Aug. 22. Still expect to sell in more than 70 countries before the end of the year. Not going to predict when supply will meet demand. Clarifies accounting on iPod touch, which is different than the iPhone.

Q: David Bailey of Goldman Sachs. Drop in gross margin? Why? Peter: Delivering product at price points that our competitors can’t match. What’s the change? A: We have changes in products - new products - and so gross margin will be about 30%.

Q: Guidance again. In past usually guide earnings per share down in this quarter, but it always goes up. So what’s different this quarter? Peter: “We give you guidance that we have reasonable confidence of achieving.” I have guided revenues up 5%, but we see gross margin down, and I’ve given you the three reasons. Q: Is price one of the reasons gross margin is down? No new answer.

Q: A question asked from an iPhone, so questioner has to make sure they can hear her. Q: What are you going to with all that iPhone cash. A: No change in what we do with our cash.

Q: JPMorgan: More focus on margins. More flexible pricing coming along? Maybe not such a high price leader in future? A: Ducked. Q: Buzz about corporate IT houses using iPhone in business? A: Ticks off enterprises writing custom apps. No hard evidence supplied of companies allowing employees to replace BlackBerries with iPhones.

Q: Morgan Stanley: Inventories up? A: Increase related primarily to “buy head” we did with launch of 3G. Q: Profits reinvested into stores to support higher traffic? A: Praises Ron Johnson for the 32 million people who visited Apple Stores this quarter, up 10%. Redesigning some early stores.

Q: Merrill Lynch: Operating expenses: What can and can’t be deferred? A: This is pretty obscure stuff. They lost me.

Q: Will new countries getting iPhone be generally added in blocks of 20. Yes, mostly in blocks. Q: Profits from App Store? A: He compares App Store to iTunes Store. No new info in his answer.

Q: Toni Sacconaghi: How much of your guidance has to do with overall consumer market? A: We’re going to leave economic commentary to others, but we didn’t see any impact on our sales. (i.e. so far, Apple seems to be recession proof). Q: In terms of iPhone ramp, can you confirm that there have been no component problems. If not, why not delay launch so you could avoid frustrating customers? A: Demand has been staggering. Manufacturing is right on schedule. Gives us confidence to launch in 20 more countries in August. Q: Gross margin (again): iPhone is a signficantly higher gross maring product than your others. Shouldn’t gross margin improve in future? A: iPhone is currently a small part of gross margin because of subscription accounting. We’re very happy with the margins.

Q: Cap Markets’ Abromsky: iPhone knockoffs proliferating. Could be crowded fall. What sustainable advantages do you think you have? A: Tim: Software is the key ingredient for a great mobile experience. We believe we are many years ahead of the competition as long as it doesn’t step on our IP (intellectual property). Peter: Cutomers have already downloaded over 25 million applications. (!)

Q: Evidence that you can sustain this kind of growth you had out of the gate? A: Tim: We’re making no prediction. We believe we are growing the market. And that many people didn’t have an idea what a phone could do before we introduced the iPhone. (That’s a good answer.)

Q: Oppenheimer: School sales effect on average sales price? A: Lays out the term of the sale (rebate for iPod). Account for rebate as reduction of revenue. Q: Average sales price clearly lower for iPod due to high number of shuffles. A: Doesn’t answer. There was some cannibalization from the iPhone, but repeats what Steve Jobs said: if there’s going to be cannibalization, we’d rather it be by the iPhone.

Q: Shaw Wu: Looks like Japan business regressed after the last two quarters, why? And why is iPod sales price down? A: Pleased with Japan subsidiary. Grew at 40% this quarter, better than the rest of the quarter. In the PC industry, Mac was up four to five times higher than industry. As for iPod, ASP, it was down becaue of Shuffle price decrease. The school sales will have its impact later in the summer.

End of Q&A

Start of official remarks

5:02 p.m. Oppenheimer. Highest June quarter revenue and earning in the company’s history. Points to 38% growth in revenue. and record Mac sales. Operating margin 18.6%, which he describes as higher than expected. Sales in stores up 32% (I think). Traffic numbers in the millions. Mac product. Extremely pleased to have shipped 2.5 million Macs. Desktop sales up 49%, sales of portables up 37%. year for year. Thrilled with the momentum of the Mac business. Now all time highs in college and K-12. 3 to 4 weeks inventory.

Music: iPod sales grew 10% domestic, higher abroad. Led by shuffle. Gained share internationally-  70% in U.S., over 50% in U.K. Double digit share in the rest. What else are they buying?

More than 5 billion songs sold. No numbers of TV or movie sales.

Shipped 717,000 iPhones. $419 million in rev. but none of that is post March 6 hardware revenue. Off to great start with iPhone 3G. Selling in 22 countries (France on board now?). App Store currently offers more than 900 apps, more than 20% free.

Apple Stores. More than half of Mac sold to customers who hadn’t owned a Mac before. Opened eight stores in the quarter. 216 stores at tend of quarter. Increased revenues of 33% per store. On track to end the year with 242 stores.

Gross margins. 34.8%, I believe. (Better check that; confirmed). Operating expenses’s $1.21 billion. Tax rate lower than guidance. Huge pile of cash that hasn’t been recorded from iPhone sale.

Expects Gross margin down to 31% in September quarter, in part because of new product introduction he can’t talk about yet. (Planting the seeds of a million rumors there.)

5:00 p.m. We’re starting. Nancy Paxton introduces Peter Oppenheimer and Tim Cook. The usual warning.

4:58 p.m. CNNMoney: “Apple beats estimates but guides lower” (link)

4:55 p.m. Silicon Valley/San Jose Business journal describes Mac sales as a new record and points out that $1.19 EPS beat the $1.07 analysts on average expected.

4:52 p.m. Reuters is lumping Apple with American Express and Sandisk as companies whose results “disappointed investor.” Seems a bit early to make that call.

4:48 p.m. Apple shares are down more than seven points in after hours trading.

4:46 p.m. Macs sold in the quarter: 2,496,000. That’s a chunk of hardware, and it’s probably where the bulk of that revenue came from.

4:40 p.m. For the quarter, Apple sold 11 million iPods and 717,000 iPhones. The company expect Q4 earnings per share of $1 on revenue of $7.8 billion. (Looking for Mac numbers.) Those iPod numbers are a tad higher than expected. The iPhone numbers are lower. The expectations seem to be unusually conservative, given all the iPhones they’re selling and all the Macs they will sell in back-to-school specials.

4:37 p.m. The numbers are coming over the wires. Earning of $1.07 billion, or $1.19 a share on revenue of $7.46 billion. Revenue rose 38% year to year.

4:36. p.m. The 8-K has been filed. Result shortly.

4:34 p.m. After a few hiccups, we’re patched into the conference call. The background music sounds like Mozart to me. We put it to Shazam, a free program from the App Store that correctly identified a couple Beatles songs and an Elton John. Shazam tells me it’s Jelly Roll Morton’s London Blues. Hmm.

4:23 p.m. While we wait, here are the Street’s expectations for sales of Apple’s main product lines, from Munster’s latest report.

• Mac: 2.2 million
• iPod: 10.3 million
• iPhone: 730,000

4:19 p.m. Still waiting. Reviewing the guidance numbers for this quarter that Apple issued three month ago: Earnings per share of $1 even on revenue of $7.2 billion. At the time this was considered less conservative than the guidance issued in January.

4:09 p.m. Nothing from Apple or on the wires yet.

3:59 p.m. Apple shares rebounding at the close and have just passed into green territory. Go figure.

3:54 p.m. Piper Jaffray’s Gene Munster and Bernstein’s Toni Sacconaghi both issued reports to their respective clients this afternoon. Munster predicted that strong Mac and iPod sales “may drive upside to June quarter results” and reminded readers that Apple’s guidance is conservative. Sacconaghi also expects Apple to beat earnings on strong sales, but thinks gross margin is “unlikely to show significant upside.” (Do these guys ever see downside?)

3:35 p.m. For the record, Apple is expected to report net income of $972.6 million, or $1.08 per share, on sales of $7.4 billion, according to Thomson Financial’s survey of analysts. In the same period last year the company earned $818 million, or 92 cents a share, on sales of $5.4 billion.

3:30 p.m. The company should issue a press release with its quarterly earnings when the market closes at 4 p.m. — and not a moment too soon. A New York Post piece revisiting question about Steve Jobs’ health this morning (blind sources “worried,” no real news) set the theme for today’s Apple coverage on the business wires, and the stock has been taking a beating almost since the opening bell. We were expecting a bumpy ride, but we weren’t expecting this.

Well, not quite. As of Sunday 9 p.m., according to Apple’s (AAPL) availability widget, there were three stores in the United States that still had iPhone 3Gs in stock:

• New York City, Fifth Avenue: White 16GB only
• Pleasanton, Calif., Stoneridge Mall: Black 16GB only
• Salem, N.H., Rockingham Park: White 16GB only

What would the world look like without that widget? Below the fold, Justine Ezarik (iJustine) gives us a peek: