Look at it from a different point of view: the pile of cash Apple is sitting on is more than $100/stock. So the valuation of the company (minus cash), is only $350 (given the after hours trading range). Apple also pays more dividend than a government bond pays in interest.
So consider Apple for a moment like a utlity stock: people will keep buying smart phones, computers, tablets, etc. People are lazy switching platforms once they are in a particular eco system. If Apple just is good enough at keeping up with everyone else, without being the leaps and bounds leader, then they can make enough revenue and profits to justify the stock price with ZERO GROWTH.
But even that would be hard to do, because there are significant markets Apple has barely started to tap into, so even without groundbreaking new products, Apple has years of growth ahead.
Apple is certainly not asleep at the wheel; they innovate on many levels, down to things like alternative energy sources, so they have IP they can license for revenue streams investors don't even think about. And that's without going into potential future markets such as embedded systems (home/car), TV, photo/video, etc.
Plus they still have a huge pile of cash with which to buy into growth opportunities in case they totally forgot how to innovate.
And investors forget, that while Jobs was involved with a lot of things and had his names on a few patents in the sense that he was involved in details of design and such, it's not Jobs' engineering skills, etc. that produced these products. The innovation at Apple comes from the many smart people who work for the company, Jobs was mainly a great figurehead, leader, marketing guy; a person around which the media could focus the cult of Apple; but nowhere near as important as people make him out to be, aside from breaking out from certain common "wisdoms" such as e.g. false cost cutting, etc.
But these important deviations have long become part of the Apple corporate fabric, they don't rely on Jobs being there to remain there for a long time to come.
You can't treat Apple like a utility because they pay a crappy dividend. Utilities tend to be good income stocks on the other hand. And that cash pile is useless to me as an investor. Look at RIM. No debt. $3 billion in the bank. They're stock still crashed to oblivion when they started failing, and they had somehting like $10 billion in the bank when their troubles started. And like it or not, that's what investors are worried about. One bad iPhone launch and the stock will tank. Not to RIMM levels, mind you. But to under $400.
As for new markets. I have my doubts. Apple doesn't do well when they don't control the whole setup (remember Moto ROKR?). Now look at embedded systems like cars. What incentive does Audi have to give up branding and profits/margins on nav sytsems to Apple? Have you ever seen a car company allow a standard interface on their cars, which includes none of their branding? Heck, auto groups like VAG, don't even maintain the same branding across their brands. And yet people think they'll hand over control of one of their most important customer experiences to Apple? Wishful thinking at best. And Apple just isn't capable of cooperation and integration like this:
It's not in their DNA. The most Apple will get from these companies is an optional Siri button and some Siri compatibility with their in-car systems. So unless Apple is going to start building cars, fridges and washing machines, I wouldn't expect embedded systems to be huge for Apple anytime soon.
Like I've said, TV is their best bet. But TV is just pointless to attempt without content. And, the TV producers are a lot wiser than the music industry execs that Apple strongarmed. So this is going nowhere for a while. They might actually prefer to go their own way on a web service or co-operate with Google or Amazon to combat the rising Netflix threat, than they would to co-operate with Apple. Apple is probably the partner of last resort for them.
Lastly, it's just a myth that people are judging the stock based on the loss of Steve Jobs. If that was the case, the stock never would have climbed after Jobs passed away. No, investors are just being rational and cautious. It's their money on the line. And they aren't fanboys who will only see rainbows and unicorns and ignore negative warnings.