Basing this on the 10-K? LOL - that's where you stick every single thing that could possibly go wrong, up to and including meteor strikes and global thermonuclear war, so as to cover your butt later on. That doesn't mean that they really think meteors are a serious threat to the bottom line ;)
Basing it not just on the 10-k. Apple is a niche player who overcharges for their product. With an absolute free alternative out there they have almost as much reason to be worried as microsoft does. Apple has a much more loyal userbase than windows does, so they won't lose people nearly as fast as microsoft does, but if you take a look around price is in important factor to *alot* of people.