In August 2007, just after former Apple exec Jon Rubinstein joined Palm, Apple CEO Steve Jobs warned Palm CEO Ed Colligan against poaching his company’s employees. “We must do whatever we can to stop this,” he said, according to communications reviewed by Bloomberg. Colligan declined. “Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal,” he told the Apple CEO, noting–ironically–that Cupertino had hired away some two percent of Palm’s workforce as it began developing the iPhone.

And that’s proven a wise move. Today, the U.S. Department of Justice is investigating just such gentleman’s agreements as a collusive restraint on trade. And Palm (PALM) and Apple (AAPL) are sparring over intellectual property and the Pre handset, which Apple claims “falsely pretends to be an iPod.” How convenient for Palm that these communications should emerge now when its Cupertino rival is giving it such a hard time. And such a distraction for Apple legal….

Of course, Jobs was right to worry. Within a year of his warning to Colligan, Palm hired away Mike Bell and Lynn Fox, Apple VP of CPU software in the Macintosh hardware division and head of Mac PR respectively, among others hired later. And within two years, Palm debuted a new handset that some consider a worthy rival to the Apple iPhone.

Later today, Perlman–former principal scientist at Apple (AAPL) and the founder of WebTV–will officially unveil OnLive, the online service with which he hopes to upend the $46 billion world-wide videogame market. Seven years in the making, OnLive promises to create an on-demand gaming experience that rivals those offered by dedicated videogame consoles. It’s capable of streaming even the most advanced, CPU-intensive games to television and computer–Macintosh or PC–without lag or a reduction in quality. “We’re providing you with the latest high-end titles, the exact same ones you would see at Target or Best Buy, in the same release windows,” Perlman told USA Today. “But what is really cool is you don’t need any high-end hardware to play them. There’s no physical media. It’s an all-digital platform. You never need to upgrade your equipment at home.”

A compelling proposition. A potentially disruptive one too, if OnLive is able to deliver it with the reliability and ease of use it promises. Said IDC analyst Billy Pidgeon, “It’s a good idea and has potential, but the thing I need reassurance on is being able to deliver this over the network. In games there’s no wiggle room–when you press a button to fire you want to fire,” he said. “But if it works, this could be a disruptive.”

We believe that we’re on the face of the Earth to make great products, and that’s not changing. We’re constantly focusing on innovating. We believe in the simple, not the complex. We believe that we need to own and control the primary technologies behind the products we make, and participate only in markets where we can make a significant contribution.

We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot.

And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.”

– Apple COO Tim Cook on the company’s philosophy 25 years after the first Macintosh

A few quick highlights from the earnings statement and investor call before the official release, appended below.

• Apple sold 22.7 million iPods and 4.4 million iPhones during the quarter.
• It shipped 2.5 million Macs.
• Looking ahead to the second fiscal quarter of 2009, the company expects revenue in the range of about $7.6 billion to $8 billion.
• The release includes no mention of Jobs’s health.

During a call to discuss Apple’s latest earnings, Steve Jobs and his health were top of mind. Indeed, the first question of the call centered around this very issue:

Q: Well, since I’m going first, I guess I’ll ask how is Steve and hope he’s doing well. And I just wanted to know how, if you’ll run the company differently with Tim or the same and if need be, if Tim — do you feel like you would be the likely candidate if the worst case scenario were to happen if Steve was unable to return.”

Apple COO Tim Cook: There is an extraordinary depth and breadth in Apple’s executive team. And it leads over 35,000 wicked smart people. We believe we’re on the face of earth to make great products, and that’s not changing. We believe in simple not complex. We believe in deep collaboration. We have the self-honesty to admit when we’re wrong. These values are so embedded in the company that we will do extremely well regardless of who has the CEO Job. I strongly believe that Apple is doing the best work in its history.

Also the focus of some discussion the possibility of an Apple netbook. Is Apple considering entering the sub-$500 netbook market? Cook says not right now. “We’re watching that space, but from our point of view, the products are based on hardware that’s not very powerful, software that’s not that good and cramped displays. We don’t think that people are going to be pleased with that. It’s a category we watch and we have some ideas for it, but we think the products there right now are inferior.”

Here’s the official release:

Apple Reports First Quarter Results
Best Quarterly Revenue and Earnings in Apple History
iPod Sales Set New Record

“Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history—surpassing $10 billion in quarterly revenue for the first time ever,” said Steve Jobs, Apple’s CEO.

The refresh may happen yet, however. Apple (AAPL) has on many occasions uncrated new products on the heels of Macworld. In February of 2008, the company announced new iPhone & iPod touch models. In February of 2006 it debuted the Intel Mac mini and iPod Hi-Fi. In January 2005 it uncrated new PowerBooks and a month later, it announced a new iPod mini and an update to iPod photo.

Clearly there’s quite a precedent for post-Macworld announcements, and in all likelihood this year will see a few as well. Certainly, an Apple desktop event later this month or in early February would be an elegant way for the company to dovetail the official release of iLife ’09 with some new desktop hardware, celebrate the 25th anniversary of the Macintosh and prove once and for all that it doesn’t need Macworld to publicize new product releases.

UPDATE:

Mark Papermaster’s memory of Apple and IBM old rivalry is quite a bit better than originally thought. Turns out the quote that inspired this post was excerpted from a longer, far less contentious statement by an Information Week reporter.

What Papermaster said in his declaration was this:

Until this litigation effort by IBM, aside from the divested IBM personal computer business and a single sale several years ago of Apple’s Xserve product to a university, I do not recall a single instance of Apple being described as a competitor of IBM during my entire tenure at IBM.”

What Information Week reported him as saying was this:

I do not recall a single instance of Apple being described as a competitor of IBM during my entire tenure at IBM.”

A juicy quote, to be sure, but without the caveat that preceded it, an inaccurate one. My apologies to Mark Papermaster.

This is pretty funny.

Mark Papermaster, the 26-year IBM (IBM) veteran being sued by his employer for taking a job at Apple (AAPL), is convinced Big Blue’s suit is entirely without merit. Why? Apple doesn’t compete with IBM and never has.

“I do not recall a single instance of Apple being described as a competitor of IBM during my entire tenure at IBM,” Papermaster said in a court filing.

Now, I know Apple’s famous “1984″ ad (see below) is a few decades old now, and memories of the company’s 1984 Annual Shareholders meeting are well faded, even at Apple. But surely someone, somewhere in Cupertino must recall CEO Steve Jobs’s comments at that meeting.

The early 1980s. 1981–Apple II has become the world’s most popular computer, and Apple has grown to a $300 million corporation, becoming the fastest-growing company in American business history. With over 50 companies vying for a share, IBM enters the personal computer market in November 1981, with the IBM PC.

IBM wants it all, and is aiming its guns at its last obstacle to industry control, Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right?

I’d say that qualifies as an instance of Apple being described as a competitor of IBM, wouldn’t you?

Apple legal must be on a class trip or something….

But that was the hand that Apple (AAPL) was dealt. And so, with its stock trading at a little over $91 in a dismal market, the company reported fourth quarter results. And lo and behold, they’re good. Very good.

Apple, which typically low-balls its earnings forecasts and then exceeds them, appears to have done so once again. The company posted revenue of $7.9 billion and net quarterly profit of $1.14 billion, quite a bit more than the profit of $1 a share on $7.8 billion in revenue it had forecast. It shipped 2,611,000 Macs during the quarter, over 11 million iPods and nearly seven million iPhones–6,892,000 to be exact. Said CFO Peter Oppenheimer, “We had a quarterly record for Macintosh sales, and we blew it out on the iPhone.”

Apple CEO Steve Jobs was even more effusive in his praise. “Apple just reported one of the best quarters in its history, with a spectacular performance by the iPhone–we sold more phones than RIM,” Jobs said in a statement. “We don’t yet know how this economic downturn will affect Apple. But we’re armed with the strongest product line in our history, the most talented employees and the best customers in our industry. And $25 billion of cash safely in the bank with zero debt.”

Not “the best quarter ever,” as Jobs is often wont to say. But one of them. An impressive showing amid the current econaclypse.

And what of future guidance? Apple is, once again keeping with tradition. The company delivered a first-quarter outlook well below analysts’ forecasts.

When I look at this, it sends shivers up my spine.”

– Apple COO Tim Cook demonstrates a new MacBook running Windows

If there was any comic relief during Tuesday’s Apple event, it was provided by Microsoft (MSFT), which played Curly to CEO Steve Jobs’s Moe and COO Tim Cook’s Larry. Discussing the dramatic increase in the Mac’s market share in the past year, Cook said it was driven partially by “something we didn’t do: Vista.”

“I think it’s fair to say that Vista hasn’t lived up to everything that Microsoft hoped it would,” Cook said. “And consequently, it’s opened doors for a lot of people to consider switching to the Mac. And Apple has been the beneficiary of this.”

Recognize misfortune for what it is: an opportunity to lift yourself to a higher level, eh, Tim?

Anyway, according to Cook, 50 percent of all new Macs sold are purchased by switchers. Moreover, the Mac has outgrown the market for 14 of the last 15 quarters. That’s nearly four years. “The Macintosh represents 17.6 percent of all unit sales in U.S. retail,” said Cook. “That means one out of every three dollars spent on computers in U.S. retail is spent on the Mac.”

A remarkable point. And one seemingly borne out by the latest PC vendor shipment numbers from Gartner (IT) (click on chart below). Apple (AAPL) showed nearly 30 percent year-over-year growth in the third quarter, its market share rising to 9.5 percent from 7.7 percent.

Virtually everyone agrees that “OS X Leopard is far superior to Vista,” says Cook. He goes on to tout the Mac’s software. He speaks of compatibility and Boot Camp, which allows Windows to be run on a Mac.

Cook notes that Microsoft Vista’s failure at market–one of the greatest missteps in Microsoft (MSFT) history, according to Cook–has afforded Apple (AAPL) an unprecedented opportunity to win over Windows users to the Mac platform. He says Apple retail stores receive 400,000 visitors a day and that 50 percent of the company’s sales are now to Windows users.

Mac has outgrown the market 14 out of last 15 quarters, Cook continues. The Mac retail share has grown to 18 percent of U.S. retial sales, with a revenue share of over 31 percent, which means that one out of every three dollars spent on computers is spent on a Mac. Quite an achievement.

Finally, Cook points out that Macs now account for 47 percent of computers at universities. Apple has sold more Macs in in the last three quarters than it sold in all of 2007.