Four months after I introduced Dolby Labs (NYSE: DLB) as a key core stock for your portfolio, its shares are only 8% higher. But at one point during that period, its shares had nearly reached $70 a stop, leaving the company now roughly 15% below its peak. What gives?

Company Name Dolby Laboratories
What It Does Premier sound technology specialist in computers, broadcast, entertainment, and mobile applications.
Recent Price $61.08
Market Cap $6.7 billion
Trailing P/E 24.41
ROE, Last 12 Months 20.1%

Source: Capital IQ, a division of Standard & Poor's; Yahoo! Finance.

What happened?
Well, Christmas happened -- or didn't. Many retailers had been counting on consumers to buy Internet-ready and 3-D TVs. But having spent a lot of money during the last upgrade cycle, customers weren't in any mood to spend on big screens again, and revenue and earnings plummeted.

It also seems that retailers got so promotional at the start of the holiday season that consumers felt little need to shop closer to Christmas, and the feel-good buzz quickly wore off.

Also, Apple's (Nasdaq: AAPL) iPad became hot. Really hot. It sold more than 7.3 million units in the last three months of 2010, leading one Goldman Sachs analyst to suggest that the tablet computer would be a Dolby killer by cannibalizing the latter company's PC market.

Now hear this
Seems to me that Goldman's analysts need to widen their lens. Some 80 tablet models were unveiled in recent weeks, and many contain Dolby tech. ZTE introduced one with Dolby Surround 3.0, while Acer is going with Dolby Mobile. Other manufacturers, including the well-received Xoom from Motorola Mobility (NYSE: MMI), feature the AAC format. So does the iPad. Dolby, as a co-developer of the codec, receives royalties for the technology, albeit at a lower rate.

In addition, Dolby still has superior growth prospects in mobile communications, video, digital cinema, and 3-D. The sound specialist partnered with Netflix (Nasdaq: NFLX); Sonic Solutions (Nasdaq: SNIC) has selected Dolby technology to stream movies; Dolby Mobile is now on more than 60 handset models from LG, NTT DOCOMO, Nokia (NYSE: NOK), and HTC; and it also owns 30% of the 3-D cinema market and 25% of digital cinema.

And as the world increasingly goes digital with its TV signals, Dolby's on half the global TV shipments and 30% of global set-top boxes. I haven't even touched on gaming, automotive, and Via; emerging markets like India and China; the upgrade cycle for Blu-ray; Dolby Media Generator and Volume; and more.

The bottom line
True, Apple is the tablet computer market right now. But Dolby is set to take on the broad swath of tablets coming to market, and it has other opportunities before it too numerous to mention. If Wall Street decides that it wants to give us more buying opportunities, I say we should oblige it.

Apple, Dolby Laboratories, and Netflix are Motley Fool Stock Advisor recommendations. The Fool has written puts on Apple. The Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 

Fool contributor Rich Duprey owns shares of Motorola Mobility, but it does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.