It's time for Apple (NASDAQ:AAPL) to put up or shut up.

Apple reports earnings after market close tonight, and the gadget guru has everything to prove. This stock has been on fire in 2009, doubling in price since New Year's Eve and challenging all-time highs again after recovering from last year's market meltdown. With a $167 billion market cap, Apple has surpassed giant businesses like Johnson & Johnson (NYSE:JNJ) and IBM (NYSE:IBM) to become the seventh most valuable stock in the United States.

But Apple's business is facing challenges it has never seen before. (NASDAQ:AMZN) offers a reasonable alternative to the market-defining iTunes music store. Microsoft (NASDAQ:MSFT) has launched a plausible replacement for the ubiquitous iPod called the Zune HD, and the music hardware coming out of competitors like Samsung looks tasty too. Plus, the rule of the iPod is passing; Apple is moving on to a new high-growth market: smartphones.

Plenty of cell phones double as media players these days. The iPhone is still going strong there, but Google (NASDAQ:GOOG) is getting its Android army into gear, and Microsoft has updated its own smartphone platform, too. The Palm (NASDAQ:PALM) Pre assault may be stalled, but iPhone challengers are now plentiful -- and there's strength in numbers.

Add it all up, and we may be looking at Apple's zenith today. The just-completed fourth quarter saw the same challenges in weaker incarnations. The iPhone 3GS should present record-breaking sales and profits this time around, and a strong back-to-school season probably did the same for the Macintosh division. But come next quarter, we'll see the Android scaling up to challenge the iPhone for real. Will teens and hipsters everywhere keep asking for an iPod for Christmas -- or might their roving eyes turn to new toys?

Apple itself must be aware of these threats, and will probably set its next-quarter guidance on a beatably modest level. Apple has beaten every earnings target since the first quarter of 2003, and it won’t break that streak any time soon. But low-key guidance often drowns out even raucously strong results. The recent run-up in Apple's stock may have set investor expectations impossibly high. This could be your last chance to take some profits off the table -- and buy back again when the market has reset its expectations. Apple is by no means dead in the water, but it may be a while until we see a P/E ratio in the 30s again.

Think I'm wrong? My flame-retardant suit just came back from the cleaner, so feel free to fire away in the comments below. Nodding in agreement is fine too, of course.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.

Google is a Motley Fool Rule Breakers selection. Apple and are Motley Fool Stock Advisor recommendations. Johnson & Johnson is a Motley Fool Income Investor recommendation. Microsoft is a Motley Fool Inside Value selection. Try any of our Foolish newsletters today, free for 30 days.