Can anything stop Apple (Nasdaq: AAPL)? The Cupertino juggernaut continues to steamroller the competition, making rival companies look flatfooted and out of touch with consumers. However, even the world's greatest and most innovative companies face threats as markets mature and well-heeled competitors entrench for a long battle.

Today we'll take a look at not only the key opportunities investors should be watching at Apple, but also key threats to monitor, which could derail the iEmpire's ever-expanding technology fiefdom.

What to watch for: The good

  • Apple is notorious for absolutely crushing analyst estimates and yet trades for only 15 times this fiscal year's projected earnings. If you net out Apple's nearly $60 billion in cash and investments from its market cap, that multiple falls to a paltry 13. While I'm reticent in giving Apple full credit for that cash since much of it is subject to repatriation taxes and Apple doesn't have a history of returning shareholder capital, the point stands that Apple is extremely cheap by its historical pricing. When you consider that the iPad is just releasing its second version and that smartphones are still in a high-growth phase, Apple's valuation relative to its growth prospects only looks more compelling.
  • Apple's brand appeal has gone global. In Apple's recent conference call, Tim Cook cited the amazing growth the company has seen within China:
The revenue from Greater China [Also includes Taiwan and Hong Kong] for Apple for last quarter was $2.6 billion, which was up four times from the prior-year quarter. And to further -- just an exclamation point by that, we did a little over $3 billion for the entire year, fiscal year '10. So we are very, very proud of the team and the results that we have gotten there.

This point was further underscored when a Morgan Stanley survey of Chinese consumers was released yesterday that showed that among respondents looking to purchase a 3G handset, Apple came in first with 30% planning to purchase an iPhone. That's a huge blow to Nokia (NYSE: NOK), which has long been the leading mobile phone player in China. While a majority of Chinese consumers still can't afford the cost of a high-end smartphone, spending habits vary dramatically from region to region. If Chinese or other emerging market consumers spending a disproportionate amount of their income on phones as a "luxury" item, Apple's sales into China could be greater than demographics might suggest.

What to watch for: The bad

  • While Apple has been surprisingly successful in China thus far, it will have to come to a decision soon on how to handle emerging markets more comprehensively. Smartphone growth continues at a torrid pace, but that growth will increasingly shift to emerging markets with less disposable income such as India and Indonesia. This is an area that's a natural fit for cheap Android phones that should soak up market share. Even in iPhone-addicted China, challengers are lining up to target lower market niches. Incumbent search engine Baidu (Nasdaq: BIDU) has made noise about throwing its own hat into the mobile ring by creating a simplified mobile operating system. Apple can either keep the iPhone at a higher price point that risks missing a majority of buyers, or it could attempt to release a cheaper phone that appeals to these markets. In either case, Apple's decision how to handle smartphone growth in poorer markets will be its toughest test on protecting the iPhone's premium pricing model since its release.
  • One of the greatest threats to Apple is managing its massive supply chain of components and manufacturing for its different product lines. Apple has responded by multisourcing where possible, such as in storage or using both Skyworks (Nasdaq: SWKS) and TriQuint to supply power amplifiers in the GSM iPhone 4. However, in spite of Apple's best efforts to diversify suppliers, the sheer size of its demand for selected components presents a key risk. Even without any catastrophic shortage of a specific component, the sheer demand Apple puts on suppliers and its manufacturers can cause delays that limit sales of popular products like the iPad 2 for months after launch.
  • Apple's vertical integration has pushed the company into some areas where it lacks a rich history of design expertise, like chip design. While Apple's A4 was widely praised for its speed and power consumption, questions have been raised about the large size of the A5 processor. While size alone isn't a large factor in the A5's processor (especially in the iPad's larger frame), it does illustrate the difficulty that comes with designing very powerful yet power efficient designs. If Apple ever found it cheaper to use a processor from either Qualcomm (Nasdaq: QCOM), NVIDIA (Nasdaq: NVDA), or Texas Instruments (NYSE: TXN), it'd limit a key differentiating part of Apple's mobile plans. This isn't an immediate threat, but the development of Apple's mobile processors is definitely an area Apple investors should keep an eye on.

Final thoughts
Obviously, a company of Apple's size faces a litany of other opportunities and threats beyond what we've explored. For example, assessing how well a post-Steve Jobs Apple could continue to perform might be the No. 1 threat facing the company right now. The best way to stay ahead of these challenges is to be aware of the pressures facing the company, and keep up with the news surrounding Apple. The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up-to-date news on companies like Apple or any of its competitors.

Eric Bleeker owns shares of NVIDIA. Baidu is a Motley Fool Rule Breakers pick. Apple and NVIDIA are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a bull call spread position on Apple. The Fool has written puts on Apple and owns shares of Apple, Qualcomm, Texas Instruments, and TriQuint Semiconductor. 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. The Motley Fool has a disclosure policy.