The plot thickens. Wednesday night, on the back of the controversy surrounding the market's reaction to the introduction of the iPhone, Apple's ( AAPL) earnings report beat the pants off consensus profit forecasts. But the company cautioned investors regarding the next quarter's results. Reflecting many of the concerns that I expressed Tuesday and Wednesday -- which are now coming to the surface -- I expect some Wall Street downgrades today (J.P. Morgan downgraded Apple to neutral from overweight, citing soft Macintosh shipments and ever-increasing expectations) and for the stock to begin giving back the hype associated with the MacWorld announcement. (In pre-market trading Thursday shares of Apple were down 1.3%.) Many were critical of my concentration on the iPhone's prospects in these columns. "What about Apple's MacIntosh success?" was a common refrain. What about MacIntosh? Units only rose by 28% year over year (1.6 million units vs. Street chatter of 1.8 million-plus), with most expecting 35% to 45% growth! ( Goldman Sachs' model was for 37.4% growth.) The hubris of Apple has been well documented. As I have written over the past week, I remain skeptical regarding the general assumption of a seamless transition into the iPhone's uber-growth forecasts during 2007 and in the market's robust reaction to the iPhone's introductory announcement. The competition will not be standing still. It is inevitable that companies like LG and Samsung, which has its own NAND supply, will bring on cheaper products with similar functionalities and possibly even better displays -- and unlike Apple, open systems. Consider these competitive new market entrants in the handset and MP-3 player markets. Finally, last Tuesday's announcement also runs the real risk that both the handset industry's smartphone and Apple's iPod markets freeze up a bit (as demand wanes) over the next two quarters as consumers await the iPhone.