The Stalwart submits: Just taking a glance at PortalPlayer (NASDAQ:PLAY) -- the company that makes guts for Apple's (NASDAQ:AAPL) iPod. In fact, that's basically all they do, as they expect over 90% of their revenue to be iPod related in the next year.
So why do they trade at a PE of 13, while Apple trades at PE of 38? It can't really be because Apple has a diversity premium, since ex-iPod, they surely wouldn't command such a PE. PortalPlayer even has $7.50/share in cash, with a share price of $26.
If you know anything about this company, or why the market is so cautious on this one compared to Apple, leave something in the comments. My hunch would be that there's no guarantee their products will be used in future generations of the iPod, but I'm not sure.
Editor: A development that bolsters the case for PortalPlayer -- the company just announced a new chipset that allows wireless connectivity (hello wireless iPod...). Reg Hardware notes:
the integration will allow PortalPlayer-based gadgets to use Bluetooth stereo headsets and reach out to computers' music archives via the wireless networking technology, and to connect directly to music download services through Wi-Fi hotspots.
(Hat tip: Andrew Schmitt)