The fine line Apple has to walk.

Well, looks like I was right, more or less, about Apple. The iPod has given them the leverage to build their other businesses--computers and entertainment--and now they're poised to enter the phone business as well.

The perception is that Apple is going to redefine the phone business the way it is currently redefining the entertainment business, which means that the expectation is built into the stcok price. In other words, there's more room for Apple to fail than succeed.

So is it time to sell? No.

What Wall Street isn't figuring correctly is the computer portion of the business. Sure, everybody is surprised and amazed that Macintosh computers are selling so well. What most of them don't get is why.

It's not the halo effect from the iPod. People don't go, "Gee, what a nice music player. I think I'll buy one of their computers." If that were the case, Sony would be selling a ton more computers.

It's the fact that for the first time, people can buy the computer they have to have (a PC) and get the computer they want to have (a Mac). That's because the Mac is now running on an Intel chip, which makes it possible to run Windows on it.

And this is where Steve Jobs has to be extremely delicate.

So far, he's been really smart to resist introducing a new style of computer. If he had, analysts would credit the increase in Mac sales to an appealing design. This way, it should be clear that the user interface, combined with the elegant design, are what make the computer so desireable.

There's probably a lot of speculation that the next generation of Macs will come with Windows installed, and if that's the road Jobs wants to go down, I will be selling every share I own. Because at that point, developers will no longer see a need to develop software specifically for the Mac and the OS will no longer have a purpose. And that's what I mean by the fine line Apple has to walk.

In order to sell to people who have to have PCs, Apple has to be able to run Windows. But in order to sell to the people who are devout Mac fans, the OS has to be viable enough to encourage software development.

I like to think that Mr. Jobs has his pulse on the market every day, evaluating how to give just enough to the PC crowd without losing OS viability. And one very good way to do that is to make it absolutely clear that the OS is gaining ground.

That explains why Apple keeps making noise about how many people are adopting Safari, the Mac web browser. It's also why Apple is so determined to make deals with Google--having access to Google's technology distinguishes the Apple OS from Windows, adding to its value.

It'll be interesting to see what happens over the next six months. If Jobs plays it right, Apple will pull itself back to a 10-12% market share. I wouldn't be surprised if Apple has new computer designs ready to go into production should the increase in market share slow. And in fact, the delay of the OS might even be a tactical move, allowing the iPhone to come out to all the fanfare, with the introduction of the new OS delayed so that it can get its own fanfare when the timing is more propitious.

I'm holding onto Apple for now. At least until Steve Jobs gives another indication of where the company is heading at the WWDC in June.