The Dangerous Road Ahead For Apple Computer.

Don’t get me wrong. I love this company and their products. They innovate, implement, and inspire. Apple has made a good transition from Motorola G4 chips to IBM’s G5 chips. The change from Mac OS 9 to the stability and flexibility of Mac OS X was relatively painless (I’m an early adopter).

The excitement generated by a successful move into the music business with iTunes, the iPod, and the iTunes Music Store is a remarkable, textbook classic product marketing venture.

Apple’s stock price continues to be a darling. There’s almost $5-billion in the bank, no debt, and the company struggles to meet with demand in nearly every product line.

So, what’s wrong?

The road ahead is treacherous and about to change quickly. I’m not just talking speed bumps or a few potholes. Apple is about to careen off the highway and into the ditch.

First, the iPod and iTunes Music Store. We’ve all heard the plaintiff cry, “Microsoft is coming. Microsoft is coming.” It may surprise you to know that Microsoft’s entry into portable downloadable music doesn’t bother me too much.

If Apple can prosper selling hardware and software against the Microsoft hegemony, they’ll do just fine with the best music “solution” in the business.

That’s the problem.

Years ago, when Apple was just a thought in the back of both Steve’s minds (founders Steve Jobs and Steve Wozniak) they decided to call their new startup company “Apple Computer” because they so admired the Beatles and their record company, Apple Corp.

Apple Computer became a big success and to keep the copyright, trademark, and legal hounds from Apple Corp from upsetting the Apple Computer apple cart, the computer Apple settled a number of lawsuits and paid millions of dollars to the other Apple.

Years passed. Then Apple the computer company decided to get into the “music business” in a big way with iTunes, then the iPod, and then the iTunes Music Store.

The Apple Computer-cart is about to crash.

Apple Corp (the Beatles’ record company) and Apple Computer (our favorite computer company) are now at odds over music. This conflict could cost Apple (the computer company) some very big money and make the other Apple richer than they are now, which is very rich.

You see, it isn’t about who’s right and who’s wrong. I’ve read excerpts of the last agreement between the two Apples and it appears as if the Mac Apple is in the clear—they don’t produce music themselves and they don’t sell CDs (stipulations in the agreement).

Of course, that’s about all they don’t do, so Apple the Corp has an argument.

And a chance to win.

A big company like Apple Computer, with a huge market share of online music and the portable music player business now has something substantial to lose. They could lose it, too. Stranger things have happened in courts of law.

To mitigate the risk of a huge award to Apple the record company, Apple the computer company will be forced to “settle.” That will cost the company a lot of money, much prestige, the current hot product winning streak, tumble the stock price (temporarily) and set the stage for moving the company straight into a ditch.

That brings me to Point #2 and Page 2.

It won’t be Microsoft that causes Apple to ditch their current success streak.

Click Here for Page 2…