Apple Computer in the past decade has risen, phoenix-like, from the ashes of its own managerial incompetence to attain new heights of profitability (up 27 percent in fourth-quarter 2006 to $546 million), market capitalization ($74 billion at last count) and plain old street cred (traffic to Apple’s iTunes music store beat Microsoft’s Zune 30 to 1 on Christmas Day)

But the ball hadn’t even started its descent in Times Square before CEO Steve Jobs and other Apple execs were facing a New Year’s hangover of antitrust lawsuits, software holes, and a nagging SEC investigation into stock-option irregularities. Together, the lawsuits and hacks threaten to undermine longtime strengths for the company. But one expert says pressure to innovate, rather than courtroom challenges, are the biggest threat to Apple’s future.

The glum news about Apple started well before the holidays, when the company announced on June 29 that an internal review had discovered irregularities related to the issuance of stock-option grants made between 1997 and 2001, including a grant to CEO Jobs.