My main problem with Apple right now is that they've stagnated.
iPods:
1) The new nano takes design cues from the Zune
2) The 160 GB version was too fat? WTF?! The whole point of the 160 GB one was that you could put ALL your music in the car or on a dock and it didn't matter how thin it was because nobody ever saw the side, just the front. We didn't CARE if it was slightly thicker.
3) So.... what did they do to the iPod touch? Exactly. It's still the same product - adding front USB ports to my computer is not revolutionary and neither was adding volume controls. And other than that, it's a little bit thinner (when it was thin enough), got a Nike + iPod thingie (who uses that anyways, when I run I do it on a treadmill) built-in (and I seriously doubt that the people who had been using it really cared that there was a dongle), and then we got integrated speakers. Big whoop.
Recent macs:
1) The MacBook Air... how do I describe this. It's like buying a nice pizza and right when it's out of the oven, you press paper towels onto the surface of the pizza to get all the fatty oils off of it. Yeah it makes the pizza a little healthier but then it tastes like CRAP. Look at the Lenovo X300 - just barely thicker and heavier but WORLDS apart in terms of the keyboard, ruggedness, an optical drive (although I actually agree with Steve on this, optical drives are becoming increasingly unnecessary), more USB ports... it's just a better computer from a hardware standpoint.
2) iMac Aluminum - WHAT were they thinking?! Ugly as hell and the remote doesn't attach to the side anymore. Dear god.
What happened to the Apple that brought us the Titanium Powerbook - Not just the first 17" laptop to the market but the lightest too (I have a Dell laptop from the same time period, twice as thick and the same weight but 15.4")? What happened to the Apple that forever made the CD player obsolete? What happened to the innovation at Apple? What happened to "Think Different" - the Apple that wouldn't settle for tiered pricing on iTunes? What happened to the Apple that decided that public image was more important that big sales?
I know a few users that used to be part of Apple's core audience - they still hold onto their Powermac G5's and eMacs. That was back when owning a Mac had a statement. Now that I can go to a completely random person on my dorm floor to borrow a USB cable for my iPod, Apple is no longer the status symbol nor the image it used to be.
Want to be innovative Apple? Simple - go pick off the remains of Microsoft's failed efforts. Microsoft has the brain talent but not the means to market it properly. Proper example - Tablet PCs and education. Simply make a Macbook that has a reversible screen, a pen silo, put proper handwriting recognition in OS X, and jack the price up $500. I see enough MacBook Pros to know that student's parents will be able to afford it. Sponsor initiatives to get paper textbooks onto these Tablets and you're basically marketing the Jesus laptop for a student. And then, be innovative while you're at it - put in a nice high pixel-density display, make it light like the MacBook Air... you could go places with this.
I think Apple can find ideas, I just don't think that Apple has the balls anymore to sell it.