A big reason for the P/E is Apple's market segment is consumer goods that get rev'ved every year. Consumer electronics are a fickle market. Ask Sony and Ninte

A big reason for the P/E is Apple's market segment is consumer goods that get rev'ved every year. Consumer electronics are a fickle market. Ask Sony and Nintendo about it. One of the nice things about Samsung and LG is that they can smooth their earnings with component sales. Apple needs to continue this great string of great products. If they do one rev of a subpar product they can see profits drop 50% in one cycle -- and this is in part due to Android. Android is close enough now to eat up share if Apple slips. And WP7, post-Mango, will be there too. So the discounting is really some healthy skepticism that Apple will be able to keep on this roll. One thing history tells us is that the companies that are great today, will tomorrow be a HBS case study for how their greatness caused them to have a blindspot.