By Douglas A. McIntyre

Apple (AAPL) shareholders were thrilled when its market value moved above that of Wal-Mart Stores (WMT), Google (GOOG), Microsoft (MSFT) and then the world's largest oil company -- Exxon Mobil (XOM). 

Apple became the market cap leader among the world's public companies. However, the consumer electronics company's shares have fallen so quickly that Exxon may soon take the top spot again.

Exxon's market value is $401 billion, against Apple's $480 billion. Over the past three months, Apple's stock has fallen 25%, compared to a drop of 5% for Exxon. Apple's collapse could cause the two to trade places, which would be humiliating. Exxon may take first place by barely standing still.

Wall St. has begun to speculate that Apple's shares could breach $500 on the way down -- a level at which it has not traded since last February. Citi recently cut Apple to "neutral" and cut its price target to $575 from $675.  It would not take much to cause the shaky share price to dive further.

First among the worries about how Apple's earnings will fare is its rivalry with Google Android-powered devices. Although Android does not make money for Google, an army of smartphone firms have adopted it. According to research firm Gartner, Android's worldwide share of the smartphone market was 74% in the third quarter, up from 53% in the same period a year ago. The market share of Apple's iOS fell from 15% to 14% over the same period. And Google has built its own personal computer based on the operating system.

Foremost among the smartphone companies that have embraced Android is Samsung, which has passed Nokia (NOK) as the world leader in cellphone share. Its Galaxy S III smartphone have been rated by experts as better than Apple's iPhone 5. Apple has not faced that sort of troubling comparison since it released the first iPhone.

Apple has much at stake in a series of intellectual property suits against Samsung in several countries. The most important may be in the U.S., where Samsung was found to have violated Apple patents and was fined more than $1 billion by a federal court. But that case has been appealed, and there is no guarantee Apple will hold its advantage.

Apple's market share also has been eroded in the tablet PC business. The competition has become more heated because of products from Samsung. But the biggest threat to the iPad, based on market share, is Amazon.com's (AMZN) Kindle, which has evolved from an e-reader into a tablet, and it is backed by Amazon's powerful marketing presence on the Internet.

Some analysts believe that a drop in Apple's share of the smartphone and tablet businesses is inevitable. Its presence in these markets has been so strong that competition eventually will erode its position, even if that erosion is modest. But the optimists about Apple's share price had forecast that there would be little erosion at all. That forecast has turned out to be faulty.

(Microsoft owns and publishes Top Stocks, an MSN Money site.)

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