With the way Apple (Nasdaq: AAPL) not only straddles the burgeoning tablet and smartphone markets but also holds sway across the computer, home-entertainment, and media fields, the moves it makes can have an impact on the future of hundreds of companies. With that in mind, we're taking a look at the week in Apple news to see how the latest activity affects the Cupertino giant, its suppliers, and even its competitors.

Why are hedge funds chasing Apple?
Hedge-fund guru David Einhorn made the media rounds this week promoting his stake in Apple. In his interviews, Einhorn focused mainly on the "halo effect" associated with Apple products. After buying an iPhone, users tend to move on to Macs or iPads, creating a cycle of higher revenue for the company. Einhorn also placed emphasis on the company’s reasonable valuation, citing its cheap multiple for a company displaying such outsized growth.

The hedge-fund world is extremely diverse, with a wide variety of investing styles and techniques. For example, in addition to promoting Apple, Einhorn also listed Sprint (NYSE: S) and Vodafone (NYSE: VOD) as top picks. While the Apple story is one of a strong brand and growth at a reasonable price, the thesis for buying Sprint is centered on valuable spectral assets and Vodafone is usually seen as an undervalued company whose price will spike once its Verizon Wireless joint venture with Verizon (NYSE: VZ) begins paying out cash dividends.

However, despite all the diversity seen in this sector's investing approaches, the love for Apple is unparalleled in the hedge-fund world. Goldman Sachs releases a quarterly list of the most popular stocks held in fundamentally driven funds, and Apple leads the list as a top 10 holding in 75 funds. The second-place stock, JPMorgan Chase, appears in only 42 funds. Obviously, Apple's size plays a part here, but for comparison, peer Microsoft is a top 10 holding in only 34 funds.

Of iPads and fragmentation
In news that should shock no one but will still attract boatloads of attention, reports indicate that the second generation of the iPad is on track to launch next April. The reason Apple's refresh should come as no surprise is that the company is extremely consistent with refresh cycles, generally updating each product line once a year. With the iPad being released last April, it was due for some shiny new bells and whistles.

So what can consumers expect from an iPad 2? Obvious additions like a back- and front-facing camera are widely expected, and Reuters also reports that suppliers believe the updated iPad will be slimmer and will feature a higher-resolution display.

More firepower under the hood is another area Apple could focus on. Recent games released to the App Store, such as Epic Games' Infinity Blade, are pushing Apple’s A4 processor to new limits, offering 3D gameplay that looks stunningly close to what modern gaming systems offer.

The proliferation of these high-tech games needing top-of-the-line hardware brings up broader issues that will affect the battle between Google's (Nasdaq: GOOG) Android and Apple's iOS-based devices: fragmentation.

For example, a popular game named Dungeon Defenders that's being released for Android phones will be playable only on phones and tablets using NVIDIA's (Nasdaq: NVDA) Tegra 2 processor. That kind of fragmentation is a real threat to Android. As the operating system ages, huge differences in phone capabilities will open up, causing headaches as apps might be compatible with only a small number of available phones. To be sure, not all Apple products will be able to play the newest games either, but Apple's tight control of its App Store and limited number of iPad, iPhone, and iPod devices should provide a smoother user experience.

Historically, Microsoft's Windows overcame this same problem of fragmentation, but the mobile market might be different. Whereas the PC had to be a utilitarian device that worked with a broad array of company networks and software, in mobile phones people are more focused on devices that work seamlessly and are hassle-free. It's still early in the Android-versus-Apple battle, but expect the fragmentation debate to keep gaining attention.

That's it for this week's Apple news. If you're searching for other opportunities in the mobile world, we've created a special report featuring a mobile giant that The Motley Fool has put its own money behind. Get instant access to this report right now.

Eric Bleeker owns shares of NVIDIA.

Google, Microsoft, and Vodafone Group are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers choice. Apple and NVIDIA are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, JPMorgan Chase, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.