Attention everybody who heard Apple's original prediction that Apple's retail stores would be profitable right away and immediately snorted in utter disbelief: your pessimism, while perhaps unattractive, was right on the money. In other words, you were right that Apple wouldn't make any money-- at least not in the first year of its retail initiative. AtAT's resident fact-checker and Goddess of Minutiae Katie happened to notice that Apple filed its annual 10-K form yesterday, and while we're about as likely to go crawling through over eighty pages of financial data as we are to star in a Broadway musical based on Ayn Rand's Atlas Shrugged, luckily there are always condensed info-bites from Reuters for us to fall back on-- and apparently those spiffy retail stores are going to be bleeding a little red ink for a while yet.

That's no reason to start panicking, of course, so if you were headed to the corner to huddle naked in a fetal position while rocking back and forth and muttering "I can't go back to CompUSA I can't go back to CompUSA," hold up a minute. Things really aren't that bad; instead of the originally-predicted break-even quarter and small profit for the year, Apple now expects its AppleGaps to report a "small loss" in both time frames. That's not the end of the world-- nor is it the end of the Apple stores. So if you've been using Apple's immaculate Australian-floor-tiled bathrooms instead of the official mall ones out by the food court, relax; you don't have to go back to the cesspools just yet.

For one thing, Apple states that the stores' impending "small loss" won't be due to anything fundamentally wrong with the company's retail strategy, but rather to-- surprise, surprise-- "the continued deterioration of the U.S. economy and the after-effects of the events of Sept. 11." Sure, a loss is a loss, but if the strategy is sound then that loss should turn to profit if the economy as a whole ever improves. And Apple's got enough cash to ride out the storm until then; in fact, the company is even planning on spending another $200 million on "capital expenditures" this year, and a big chunk of that is reportedly earmarked for "more Apple-branded retail stores," according to AFXpress.

Personally, we always figured that the retail stores might be a money-losing venture, but we always felt that was just fine; in our eyes, any loss those 27-and-counting stores might report should just be considered a marketing expense. More than anything else, the stores are big, gleaming Apple ads, spreading the gospel and sticking the company logo in the faces of millions of shoppers across the country who might otherwise never even think of "Apple" as anything other than a Jolly Rancher flavor. So red ink, shmed ink-- here's hoping those stores keep sprouting up next year, and more power to them.