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Without Steve Jobs, Apple Has All The Appeal Of Dell

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No one should own so much Apple stock that a significant share price drop would impact their financial standing.  Apple is toast.

Bubbles come and go and,  despite what many appear to believe, Apple is one of those bubbles.

There will always be explanations as to why an aberrational situation is actually OK, why an incredibly expensive stock should in fact be thought of as cheap, why said wonder-stock will continue to go up and up, forever more.  The classic line is: “This time it’s different.” John Templeton hated that one.

Apple’s incredible success serves as proof to many that the company is different. It’s surely a special case. Financial numbers have been amazing while the company has continued to produce hit after hit. Former CEO, the late Steve Jobs, is widely considered to have been a genius.

Yet even when these factors are taken into consideration, there exists no justification and no hard evidence suggesting that Apple can hold its position as the world’s most valuable company over the long-term.

It is Apple's “hit after hit” dynamic that is, in fact, Apple’s major weakness. It’s the core flaw in the argument that says its position is sustainable.

For Apple’s stock price to break through previous highs--at least by any significant amount--it will need to come up with new products just as amazing as the iPhone, iPad and iPod. Market reaction to the most recent quarterly figures released by the company underline the painful truth that to maintain its current valuation, Apple must keep up its chain of product hits.

Basically, the iPhone 5 needs to be amazing yet my guess is the latest update of Apple's iconic smartphone will fail to make the technological quantum jump required. If I'm right, Apple is on its way back to corporate normality and a much lower stock price.

The calculus is simple: Apple + Jobs = phenomena. Apple- Jobs = normal company.

I could go on about how the iPhone is now passé. How you now see old folk with iPhones scrubbing away hip and groovy from the Apple brand. I could rattle on about how great my Samsung Galaxy is. I could jibber about how Google 's Android is going to kill iPhone.

Yet that’s not it.  Hit-driven businesses are fragile. They are worth less than those businesses which are not reliant on avoiding business- model- destroying product flops.

Apple can be compared to Electronic Arts, or a film company with summer releases: all you need is to string a few flops together and the company’s stock price ends up in the dumpster. This is the precipice that Apple is poised on the edge of.

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Does anyone think Jobs wasn’t ultimately the genius behind the Apple product line? The same genius pulling the strings behind the Pixar string of mega-hit movies. Even the most negative books on Jobs and Apple make it clear that Jobs was the driver of the product.  That's now, sadly, over.

The influence of the hero CEO will soon fade and with it, the product.

Unless there’s a jaw-dropping product in the pipeline, then the rough reception after Apple's earnings miss can be notched up as the first step of the superstar company’s reversion to the corporate mean. What would Apple be worth if it was a normal company? Ask Michael Dell.

Clem Chambers is CEO of the leading financial information and investors website ADVFNand author of books including A Beginner’s Guide to Value Investing and 101 Ways to Pick Stock Market Winners, both out now on the Kindle. His latest financial thriller is availabe for pre-order now.