Apple Inc. (NASDAQ: AAPL) is starting to feel the heat in the aftermath after having become the biggest and best for new hot products along with a cult stock following.  Steve Jobs has made the iPad and iPhone a serious issue regarding Adobe Systems Inc. (NASDAQ: ADBE) for not allowing Flash to run on the systems.  Its market cap has now surpassed Microsoft Corporation (NASDAQ: MSFT).  It is taking on Google Inc. (NASDAQ: GOOG) in advertising and soon in search.  It is fighting for every red cent it can take from Amazon.com Inc. (NASDAQ: AMZN) in media sales via books, movies, and music.  It is even now going around Intel Corporation (NASDAQ: INTC) for the processors on many of its newer products.  The company is also having issues with the iPhone 4 that are being dealt with in an odd manner, with a conference call today. With earnings coming out next Tuesday, it may be time to rethink the perma-bull strategy here.

The consensus data for Thomson Reuters is $3.09 EPS on $14.66 billion in revenues, although this will likely have changed by the time that the earnings report hits on Tuesday afternoon.  The estimates for the following quarter, its year-end quarter, are $3.81 EPS on $16.89 billion in revenues.

Thomson Reuters compiles data of its own for consensus data, but it also has an interesting trading and options strategy around the possibility of the stock being range-bound brought from Thomson Reuters’ own internal analysis that takes today’s issues into consideration.

You can also track the war for #2 by market caps in Apple versus Microsoft $228 billion vs. almost $220 billion in our own proprietary Real-Time 500 tracking of the 500 largest U.S. companies by market cap.

Options expiration is today, so knowing what the real at-the-money straddle ($250 today) will cost going into the earnings report is somewhat guesswork until after the July-run expirations have cleared away.  The cost for the at-the-money straddle for an August-2010 (Aug. 20) expiration is $27.00 as of this morning.

Apple’s chart is creating issues of its own.  The 50-day moving average is starting to act as a magnet, and today’s level for that is $255.54.  Whether it holds ahead is another matter, but shares have been stuck in a $245 to $260 implied trading band for the last two weeks.  That wouldn’t matter normally, but it has been during a time that the DJIA has rallied 800 points from trough to peak over the last 10 trading days.

There are several key issues noted above in competitors that are all going to be sideshows and will play into the iPhone 4 issues and the coming earnings report next week.

Will it take more Amazon.com?  Some believe that is the case and that has acted as a drag on Amazon.com shares.  Apple has many more product loyalists, but Amazon.com is not going away.

Will Apple’s war against Adobe for Flash create a Microsoft-type rebellion?  My own personal experience for iPad is greatly lowered for what would have otherwise been a great tool in the iPad.

Will Apple keep on the road of developing its own processors?  It seems unlikely on many fronts of an outright replacement, but Intel is not inside many of the smartphones and hand-held computing devices out there even outside of Apple.

Will Apple make significant headwinds against Google in advertising?  Or what about search for that matter.  It does have Safari and it did acquire Quattro Wireless for mobile ads… Google’s Droid phones are continuing to sell well with techies, and any new problems with iPhone4 may only be more of a chance for Google to fend off the Apple attack on mobile ads.

Lastly, there is concern that the rising labor costs in China and the tight supplies in all the guts for the devices will only lead to higher prices being paid for faster and assured internal component shipments.

While details are unknown and while the ultimate outcome is unknown, the iPhone is said to be headed away from the AT&T Inc. (NYSE: T) exclusivity over to include Verizon Communications Inc. (NYSE: VZ) after the start of 2011.  There is even that new pesky NTP suit over wireless email applications along with numerous other patent cases it has outstanding.

Apple finds itself in a different light going into its fiscal-Q3 earnings report.

JON C. OGG

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