Wall Street (among other people) has this belief that Apple products are a temporary fad. I don't think Wall Street thinks (if any conglomeration of people lik

Wall Street (among other people) has this belief that Apple products are a temporary fad. I don't think Wall Street thinks (if any conglomeration of people like "Wall Street" has a single view of course!) that Apple products are a temporary fad, but rather than Apple's massive margins must be temporary. Apple has stunning margins on their products, and the history of technology is that huge margins don't last: eventually competitors come in and work out how to undercut you. Now, Apple has historically managed to maintain it's huge margins because they not only had the best products that they could sell for a premium price, they also had the most efficient supply chain in existence: look at how no one else could even make a competitor to the iPad or the MacBook Air for years and make any money at the prices Apple was charging when Apple was making a 40% margin on them! Regardless, the Street view is that 40% margins don't last forever, and the iPad mini is the first real sign of this. If you follow this line of thought, then the fact that Apple is trading at 10x today's earnings is irrelevant: if Apple have to cut their margins in half (which would still probably leave them with bigger margins than all their competitors!) then going forward that share price is 20x earnings (unless they can improve sales), which doesn't look so tempting. Of course, the Street is often wrong & Apple may maintain their margins & sales, in which case you should load up on Apple stock right now, because it's obviously significantly undervalued! Choose your poison :)