Apple's Long-Lasting Shine

"There are a lot of ways [Apple] could go to bring all those [digital content] pieces to market that's more seamless and integrated than anything else out there. That seems to be [Apple's] strength," says Stephen Baker, who covers the computer industry for the NPD Group, a research firm. "This is a good year to do it."

Amid all the speculation is one certain change for Apple's products next year: On the Macintosh side, the company will begin to move away from its long reliance on PowerPC processors from IBM (IBM Quote) and Freescale Semiconductor(FSL Quote) to using chips from Intel (INTC Quote).

For bulls, the move portends good things for Apple in the PC market. Consumers are increasingly looking to buy laptops instead of desktop computers. While Apple's laptops have long been praised for their design, they increasingly have been seen as underpowered, thanks to the long delay by Apple's PowerPC suppliers in developing a low-powered version of the high-end G5 processor.

Once Apple makes the switch to Intel, the company's laptops no longer should be at a speed disadvantage to competitors, analysts note. Intel has a robust line of notebook chips, which are the industry's standard.

The switch "is going to help them a lot," says Van Baker, an analyst with research firm Gartner. "This solves one of the big problems that they've had."

Despite the obstacles on the notebook side, Apple's worldwide share of the PC market has risen from roughly 2% in 2004 to about 2.4% through the first three quarters of 2005. Some bulls think that market share will rise to as much as 10% in coming years, thanks not only to the Intel chips, but by using the iPod to attract new Macintosh customers -- the so-called halo effect.

"The halo effect is definitely here," says a portfolio manager at a major financial services firm who is long Apple.