You know Apple Computer is having problems when chief executive Steve Jobs makes an appearance on the company's earnings conference call. It's a shame Jobs can't rally Wall Street analysts the same way he rallies the faithful at Macworld. Simply put, Apple lowered its fiscal fourth quarter earnings bar and still tripped over it. Needless to say, investors weren't pleased and shares stumbled in after-hours trading Wednesday. The company missed consensus estimates with fourth quarter earnings of 30 cents a share, detailed inventory problems, predicted a slight profit in what's supposed to be a seasonally strong December quarter and forecasted flat revenue for fiscal 2001. In his tenure as Apple saviour, Jobs hasn't talked much to Wall Street. Jobs created the buzz and left the numbers to chief financial officer Fred Anderson. But following a profit warning and three weeks of silence, Jobs had to reassure investors when the official results came out. Jobs, who was out of his element with those skeptical Wall Street types, really had no choice. The message from Jobs and Anderson was clear -- we know what's wrong and we're taking steps to fix it. All you have to do is put up with "two disappointing but profitable quarters" and believe Apple can concoct some great products to propel it in 2001. Anderson was confident about his revenue targets for 2001. We're sure the religious Apple supporters will take the leap. But chances are pretty good Wall Street isn't buying it. Why? Executives offered no colour on what's in Apple's product pipeline or whether the company's sluggish September demand is picking up. Simply put, Apple is asking investors to take a leap of faith, but the jump-off point is slippery to say the least. You can expect a lot of negative comments from analysts today. Apple, which has been the epitome of operation excellence in recent quarters, is facing an inventory glut largely because its G4 Cube is a flop. Anderson said Apple will take measures in the December quarter to reduce inventory. "We're taking the hit and will be ready to rock and roll and grow again in January," said Anderson. We'll see. The good news is Apple seems to have a handle on what's wrong. The real question is whether it can fix the problems, some of which are out of the company's control. Here's a look at the issues:

• The G4 Cube -- What was supposed to be the ultimate Mac with the best design on the planet couldn't get consumers excited. Officials admitted the Cube is too expensive, so they're kicking in a $300 rebate to bring the cost down to $1,499. That's still too much considering the base model still doesn't have enough memory. As far as glitches, Apple said they're all fixed. The pitfall with the Cube is that it didn't get that initial buzz. How many products flop initially and then come back? You had to read between the lines, but Apple faces a perception challenge -- at least with Wall Street. Analysts were coming at Jobs with questions that implied that Apple regularly flopped with products. "In two years, we've only had one product that didn't meet our expectations, and that's the G4 Cube," said Jobs. "This problem isn't endemic."
• "The megahertz gap" -- A few readers pointed out Apple's chip problems to me following the company's profit warning. Jobs owned up to it and went with a "blame Motorola" strategy. Jobs said consumers are brainwashed to think megahertz matters in chips. Even though Apple's G4 chips may run with Intel's Pentium III, consumers are putting off purchases. Why? Apple can't tout a 1GHz chip because Motorola can't deliver the goods. Apple is working with Motorola to produce faster chips within the next six months. This problem has been festering for a while. But given Motorola's G4 business is just a small part of a huge enterprise, what's going to make Motorola move?
• Education sales -- Apple was the education king. Now Dell is taking its turf. Jobs cited a sales transition for the problems. The next big selling season will be in April and Apple will be ready to grab back market share in the education market, said Jobs. Analysts weren't so sure. One analyst asked what if schools want to consolidate operating systems on Windows. Jobs had to admit there wasn't much Apple could do.
• Products -- Apple said it will have "great new products in 2001" with a competitive line of notebooks and desktops. Toss in a new Mac operating system, cool toys such as iMovie and Jobs was touting the company's ability to "control the customer experience" through vertical integration. The big problem is that Apple wasn't preannouncing products. Jobs said he may have revealed too much even though he didn't say squat. "We'll have the best product line I've seen in my career," said Jobs.

That Jobs-ian spiel won't work on Wall Street -- you can't plug top-secret products into financial models. What do you think? Tell the Mailroom. And read what others have said. To have your say online click on the TalkBack button and go to the ZDNet News forum. See ZDII for US tech investor news. See techTrader for more technology investment news, plus quotes and research. See Chips Central for daily hardware news, including an interactive timeline of AMD and Intel's upcoming product launches.