Cramer recently updated his AAPL target to $300. While I have been Bullish since returning from Ecuador, recently I have been pulling back. But that isn’t my reason for throwing some mud on the $300 stock value.

Looking at a recent BusinessWeek valuation comparison. Apple is in second place:

  • Microsoft — $236 billion
  • Apple — $183 billion
  • Google — $176 billion
  • IBM — $162 billion
  • Cisco — $140 billion
  • HP — $115 billion
  • Oracle — $111 billion
  • Dell — $30 billion

Apple recently had a record breaking earnings quarter; however, I attribute Apples recent record quarter to ongoing anti-Vista sentiment. But Microsoft is trying to get everyone to throw them a party for sucking less this time round with one of the most eery advertising campaigns I’ve seen since the IBM Linux boy.

I just bought myself a MacBook and iPhone two months ago because I abhorred Windows Vista, but I am still reasonable about my outlook on AAPL. I’ve heard good things about Windows 7 and want to wait to cast my verdict on AAPL’s price target until after I have evaluated it. I know that Windows 7 will likely slow down MacBook sales because Vista will no longer be driving customers to OS X. Microsoft is the king of good enough. The consumer has to choose between a 1.5K MacBook and an equivalent $750 Windows 7 box. In this economy, the consumer will think hard about the extra spend.

But what about the rest of Apple’s market? Here is my bullet list of pro AAPL $300 target and cons.
pros:

  • iTunes content
  • iPhone (unmatched application strength and speed)
  • Superior engineering design for laptops and desktops
  • Superior OS
  • Boot, Sleep and overall virus reliability
  • Linux underneath cause I’m an old school nerd

cons:

  • Still not first to be supported for new technologies
  • Proprietary connectivity
  • Expensive (even in this downturn they did not lower their prices much)
  • Often does not support really basic and expected functionality
  • Still not viable for the Enterprise customer :(, their market will continue to be limited to the consumer, designer, media, startup spaces.

I believe that Apple is a great company; however, technology doesn’t sit still. And while $AAPL definitely shows leadership in innovation, their competitors are becoming increasingly more threatening. iPhone is still king, but the Palm Pre, Android variations, and CrackBerry are on it’s tail. And there are hints and allegations about MS Pink.

When it comes to content, I think there is going to be continued pressure from all sides. Pandora, LastFM, etc challenge the itunes MP3 store. Amazon, Netflix and others are competing now for video. Hulu is quickly becoming an alternative to cable and while their current movie selection is poor, I believe it can and will improve and begin to compete. Overall, I believe that Apple’s content market is being challenged by a plethora of free and paid for choices.

Market pressures finally pushed Apple to support MMS (Send Pictures via text) and Flash on the iPhone. But lacking critical features like these from the get go are the types of annoyances that can keep them from being adopted and keep AAPL from being trusted by it’s consumer base. Disclosure: I gave up my first iPhone due to lack of support for both of these features. At the time the iPhone Apps simply weren’t as sexy as they are today. Right now I couldn’t imagine having any other phone but my new 3G.

Eric Schmidt, CEO of GOOG, left AAPL’s board Aug 3 because of increasing conflicts of interest. Now Google is speaking publicly about the Google OS (likely a combination of Android + Chrome + offline caching and app support) that will be releasing on Netbooks in 2010. The majority of internet users are already highly aligned with the Google brand and tools. BING is still trying to prove itself in search as a viable competitor with their recent deals with Twitter and Facebook; however, Google still holds 70% in US and 80% globally for search. With the introduction of Android, their smartphone platform, preceding it’s laptop release, they are only strengthening their brand ubiquity. And recently they have been making inroads in the enterprise with their cloud services where Apple is not a player. Tight integration here will be key to Android’s success and likely be a primary threat to BlackBerry and Window’s Smartphone spaces; however, if done right can also become a potential threat to the iPhone.

In the Enterprise space, I see a future run of Google vrs. MS with a combination of smartphone, laptop, enterprise collaboration infra like SharePoint+Exchange. Eric’s view is that the lines between the consumer and the employee lines are becoming increasingly more blurred. If this is true, this leaves GOOG in the most likely to succeed and grow position. Overall, Apple has yet to prove that it can enter the enterprise and this will limit their market potential greatly.

While I think AAPL is doing a phenomenal job. The bar is high and they will have to keep up with the innovation especially since the cost of their systems is well beyond the reach of most. They will not be able to penetrate emerging markets as well as their competition because of the price barrier. I think that AAPL was a killer buy at $8; however,to be a great buy at $200, they are really going to have to begin to make some strategic moves to grow their customer base without losing their core business model around innovation in their closed environment.

In the meantime, I believe GOOG is on the up and up.