Good point! Hopefully Apple can keep it at bay.
That could happen - when hardware becomes a zero-profit business.
Companies like Apple will never let that happen. The best will never be free, else it couldn't be the best.
It could happen. Apple cannot dictate the market conditions that determine the competitive price for computer hardware. If the other PC manufacturers get into a major price war, Apple would certainly be affected too. Profit margins on hardware are already slim, so it would be difficult to maintain current levels.
For the past few years, Dell has been selling zero-profit hardware to consumers as part of their marketshare growth strategy. They make their profits by selling to businesses.
If the hardware industry becomes unprofitable, Apple may decide to become a software-only company. That is a viable option, since they've switched to Intel processors. They could have a very strong business just selling Mac OS X and Mac applications to all x86-based customers. In his closing remarks at the Apple Developer Conference last year where the Intel change was announced, Steve Jobs clearly emphasized that the centerpiece of Apple's strategy is Mac OS X - not hardware.
Dell and Gateway, on the other hand, don't have any products to offset decreasing hardware profit margins. They don't own an operating system or any notable software products.
For now, Apple is making excellent profits by selling a mix of hardware and software products. That mix could change in the future - but I expect Apple will continue to be a computer industry leader for decades to come.