What To Do About Apple?

I'm thinking a lot about Apple (AAPL) lately. My small sum invested in it in 1999 and 2000 grew up to the biggest position in my portfolio (more than 1600% gain). I know, I know, if I did it by classic Jim Cramer book, I'd have to sell half after first double. Yeah, right, I'd lose thousands of dollars of upside. I don't follow Jim blindly, even though his advice made me many thousands. I have different investment philosophy: don't look at where have the stock been, look where it's going. In short, I constantly reevaluate my positions, and stocks I consider as candidates to portfolio. No matter if I already made a lot on the stock, if I think it's going up, I'm keeping it. No matter if I lost or didn't make enough, I sell it if I see problems with it.

OK, sorry for a longish introduction. Now, where Apple is now?
Computer sales are up. Huge! Market share is amazing! By some estimates, during last Christmas season Macs accounted for 14% of PC sales. There was some report lately with 19% number, I don't believe it until I see confirmation.
iPod sales are flat or a little bit down. Unit sales are up, but prices are down.
iPhone sales are huge. It's a new product and it sells better than hot cakes.
Accounting practice is excellent. Revenue is recognized by fact. Compare that to some companies (Microsoft, for example) where revenue is recognized when product is "shipped". In case of iPhone, Apple doesn't even recognize real money already received, spreading it through future couple of years.

Now, possible headwinds.

Steve Jobs is a very big part of Apple. I estimate that Steve is worth about half of the company. In other words, if Apple loses Jobs for some reason, stock is going to lose about half of it's price.
Market saturation. It's here for iPod. No growth visible here. It's strange to me, because I thought that world is not saturated yet, unlike US. But something else is going on here. Maybe cheap music players are better accepted outside of US?
Market saturation for Macs. Not there yet. But pretty close. Apple competes great at high level. And it makes a lot of sense: for the last 20 years at least, Apple computers were engineered better, had better driver support and customer support than anything else. These things matter for those who pays $1500 for a desktop or a laptop. Those who pay $500? They don't care. They only want basic functions anyway. Linux suits them just fine, most of them just don't know it. Yet. So I'm afraid that Apple market share in personal computers can't ever get over 25%. Maybe 40% if Apple can seriously get into enterprise. The difference between 19% and 25% is negligible, between 25% and 40% not as big as it seems. Much less significant than difference between 3% and 14%.
Market saturation for iPhones. We'll get there. Fast. It's amazing how fast cellphone market gets saturated, despite huge growth. Maybe we'll see couple more years of explosive iPhone growth. Three years would be unheard success.
Proprietary technology. Most people assume that OS (stands for operating system) lock-in (for Macs and iPhone) is a good thing. It is, to a point. It is good while you have the ability and resources to develop OS. Somewhat improved for Apple by the fact that base of Apple OS is actually a free OS developed in Berkeley (FreeBSD). But proprietary software is quickly becoming past. No company has resources to develop really big closed source software product. Microsoft Vista is a good example. Apple is trying to make iPhone OS even more closed, to the point that Apple will decide what applications can be run on the device. Yeah, right. Millions of hackers are working against Apple on that, Apple just doesn't have resources to outwit all of them. Proprietary software is a weakness of Apple, not a strength.

I'm not sure yet how it all plays out. I thought of reducing my position in 2005, when I "only" had about 500% gain on it. Decided to wait, wisely. Let's see if Apple can continue to innovate at current pace.