Bad News Day at Apple?

Lots of people have been predicting Apple's (NASDAQ:AAPL) downfall from its long-held lofty highs, but iPod frenzy has continued unabated. On Tuesday, though, two pieces of news hit the wires that might give Apple fans reason to pause.

The National Institutes of Health (NIH) today recommended that further study be performed on the use of earbuds and their possible contribution to hearing loss. That doesn't necessarily point fingers at Apple -- other companies peddle MP3 players, too, including Sony (NYSE:SNE), Sandisk (NASDAQ:SNDK), and Creative (NASDAQ:CREAF). On the other hand, given the iPod's popularity, well, it kind of does mean Apple, for all intents and purposes.

My colleague Rick Munarriz wrote about The Who's Pete Townshend making this point in January. I told him then that when I was a kid, old folks had dire predictions of how deaf everyone would be from Walkman usage, and I haven't yet noticed a propensity for hearing aids among Generation X. (In fact, there has been research on hearing loss from music players since the 1980s, based on the Walkman's popularity.)

Does such a fear matter, though? If the iPod gets associated with hearing loss, it could cause a lot of problems for Apple's image. On the other hand, I would imagine that if earbuds are deemed particularly harmful, the companies involved in the iPod ecosystem -- including Apple itself -- will move quickly to offer safer solutions. As it stands, there are already plenty of lower-impact ways to stream your iPod's tunes through car speakers, alarm clocks, and home stereos.

France's suggestion that it will force Apple to open up iTunes to competing music players is a little bit more disturbing. If iTunes has done anything, it's helped sell iPods for Apple. France's stance brings to mind Europe's antitrust skirmishes with Microsoft (NASDAQ:MSFT) -- although the parallel ends pretty quickly when you consider that, despite Apple's mutually exclusive relationship between iPod and iTunes, there are plenty of rivals who want to provide music services and devices. If France passes such a law, people seem to believe that Apple would move to shut down iTunes in France. (The truth is, I find it mystifying that France would make such a move in the first place; it makes you wonder if French iPod fans might shout, "Vive la revolution!")

I don't consider either of these issues much of a threat to Apple for the short term -- although they're interesting to contemplate. However, both of these items hitting the newswires in one day made me consider how fleeting fame and fortune can be for companies' star products. The downward spiral in popularity can happen so easily, and quite out of the blue, in events nobody could have foreseen. Given most Apple investors' extremely high hopes, they're likely hoping that the news is always good.

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Alyce Lomax does not own shares of any of the companies mentioned.