Will Apple Stay on Top Forever?


It's been an interesting year for Apple -- by turns scary and exhilarating.

The iStuff maker surpassedExxonMobil's market cap way back in January, and it's been the most valuable equity on the planet ever since. But the ride has been anything but smooth: Share prices peaked in September and have fallen more than 22% from those lofty all-time highs. The iPhone 5 and iPad Mini may be breaking sales records, but they have failed to wow analysts and investors.

Still, the stock has gained 32% year to date, leaving the Dow Jones Industrial Average far behind. It's hard to complain about market-stomping annual gains like these:

AAPL Chart
AAPL Chart

AAPL data by YCharts.

Cupertino still dwarfs Exxon's $404 billion market cap by about 20%. Will Apple be the biggest kid on the block in 2013, too, or is it time for a change at the top? What if Apple never sees $700 per share again?

If you think the idea of Apple falling back is ridiculous, you haven't been paying attention. Giants stumble all the time, and even Exxon has been bested by several giants over the last decade. Check out this historical rollercoaster:

AAPL Market Cap Chart
AAPL Market Cap Chart

AAPL Market Cap data by YCharts.

Microsoft obviously peaked a few years before the start of this chart, during the overheated dot-com boom. The software giant has seen and squandered many chances to climb back on the throne, notably with the utter failure you know as Windows Vista. General Electric suffered grievous damage in the financial crisis of 2008, being half a bank itself.

Grandpa Exxon will always rise and fall with the oil market. When we hit the dreaded "peak oil" plateau, the giant must adapt and start selling alternative energy solutions. Failing that, Exxon will shrink to a fraction of its current bulk.

Apple faces a similar innovation dilemma. The company has made an unparalleled fortune by extending and refining the basic iPhone concept over the last five years, but the market for these gadgets may soon reach saturation. And that's where Apple needs to adjust its business model, come up with mind-blowing new products (not just a bigger or smoother iPhone), or perhaps both. These are no simple "gimme" adjustments.

There's no doubt that Apple is at the center of technology's largest revolution ever and that longtime shareholders have been handsomely rewarded with gains of more than 1,000%. However, there is a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on reasons both to buy and to sell Apple, as well as what opportunities remain for the company (and your portfolio) going forward. To get instant access to his latest thoughts on Apple, simply click here now.

The article Will Apple Stay on Top Forever? originally appeared on Fool.com.

Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Microsoft, Apple, and ExxonMobil. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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