Apple, Inc. (NASDAQ:AAPL)

quinnathome (39.21) Submitted: 19/01/2011 21:03:27 : Start Price: $329.37 AAPL Score: -4.33

Apple is a two-trick pony priced like an industry-spanning colossus -- and the other horses are learning its tricks. Macs are fine machines, but with the unlamented passing of Vista, their UI, stability, and security advantages over Windows are narrowing, and it will be increasingly difficult to justify their premium pricing. Back to a niche product... iThings are impressive, but Google is nipping at their tails, and I would not rule out smart people at RIM, HP/Palm, Cisco, and maybe others from leapfrogging the iPad later this year (although how many of them ever get used for serious work remains to be seen.) Apple may out-innovate them all, but the company has had its share of turkeys over the years, so that is far from guaranteed. I expect Apple to recede toward its state in the late 1990s -- a high-cost, elegant brand with a loyal folllowing, but declining penetration outside of its smartphone/music-player core. Particularly without Jobs, I don't see Apple being able to bully film/video/multimedia content provider (or news providers) the way they did the music industry, so there will be no essential iThing for TV (and NFL owners don't get bullied by hip guys in black mock-turtles.) Maybe Apples has something up their sleeve that will create another new industry and justify their valuation, but predict not-much larger sales and much lower margins in 5 years as consumer fads shift and new gadgets emerge as must-have-of-the-year.