Everybody loves Apple Inc. The legendary corporation based at One Infinite Loop in Cupertino, Calif. is — even after this recent market selloff — the most highly valued company in the world.

Millions pay attention whenever Apple AAPL, +3.03% launches a new product. No other corporation has so many people “live blogging” its press conferences. Apple products command premium prices, and people pay them.

I’ve been a fan of Apple since getting my hands on an early Apple II back when dinosaurs ruled the world. Say this for pretty much every Apple product: They’re generally well-built and easy to use.

But for all that, this stock involves a lot more risk than many investors may realize. This is no slam-dunk investment. And a closer look at Apple creates even more concern about the stock. Read: If you don't buy Apple stock, you're crazy.

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The first issue is Apple’s cash pile. Everyone likes to focus on the $200 billion or so that Apple holds in bank accounts. That looks huge in comparison to the company’s current $588 billion market value.

The problem is that little of this cash belongs to shareholders.

Apple says about $181 billion is held overseas to avoid tax. It would probably have to pay Uncle Sam about 35%, or $63 billion, if it brought that money home. Apple also has short-term creditors and long-term liabilities that need to be offset against assets.

What’s the true picture? As of June 30, Apple had $239 billion in cash and short-term assets, less $147 billion in liabilities. That leaves a net $92 billion. Factor in the taxes from overseas profits and there would be just $29 billion left over for investors — $5 a share. Big deal.

Another looming problem for Apple isn’t a slowdown in iPhone sales. It’s that Apple faces a long-term battle to sustain both growth and margins in the U.S. and overseas. Google’s GOOG, -1.97% GOOGL, -1.44% competing Android system isn’t going away. Neither is Lenovo’s LNVGY, -3.37% Motorola, or Samsung SSNLF, . And as cellular networks move away from upfront phone subsidies, more consumers are likely to get a nasty sticker shock when they upgrade their phone.

Apple’s iPhone is core to its valuation. A new iPhone 6 with the minimum 16 gigabytes in memory costs $649 without a subsidy. Google sells a competing Nexus 6 with twice the memory for $499. There are decent quality smartphones costing as little as $100. Smartphones are becoming commodity items. Sorry, but there it is. You can buy them at Wal-Mart WMT, +1.31% .

”Glamorous” stocks on the stock market have usually proven poor investments. Capitalism works. Fast-growing companies and industries attract competitors. Market share and margins inevitably suffer. This has happened to almost every hot new company or industry throughout history. Only those who can lock out rivals and secure a near-monopoly — such as Google has in online search today — can hope to be immune.

How many customers will keep paying top dollar for the latest iPhone year after year? How long will new smartphones remain hot fashion items?

And how many customers in emerging markets will buy premium smartphones when a rival product that’s 75% as good can be had for 25% of the price?

China’s economic output is just $8,100 per head per year. India’s is $1,800. How many $650 phones can they buy?

Meanwhile, according to Thomson Reuters, the market sentiment towards Apple remains strongly bullish. And that’s not a positive indicator. Two-thirds of all analysts covering the stock are on the record as bullish. Just one out of nearly 50 is a seller of the stock. (This may reflect the pressure from the Mac fanatics. An analyst once told me he wouldn’t criticize the company in public anymore because of all the hate mail he got).

None of this need be negative for the stock in the short term. Apple is highly profitable and is returning cash to investors hand over fist, through dividends and stock buybacks. That’s always good. And the stock is not expensive, trading currently at about 12 times forecast per-share earnings. That’s a discount to the overall market, and reasonably cheap for the price of any blue-chip company even by historic standards.

But it’s not a one-way bet.