Apple does not trade at a premium to market multiples because investors are now asking themselves whether they are getting involved in a simple consumer electronics play or something more, Kevin O'Leary told CNBC on Friday.
The answer to that question is uncertain because handsets and other consumer electronics are increasingly becoming commodities, the Shark Tank investor said in a "Squawk Alley" interview. Consequently, Apple may or may not be able to maintain its unique stature and hold its margins.
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"When people say to me, 'Why don't you think this is trading at 20 percent premium because it's growing so well even though it's large?' that's the reason. I've seen this movie before."
iPhones remain the biggest part of Apple's business in terms of profit. The company saw handset sales rise 16 percent to 39.3 million units in the fourth quarter of 2014 after the launch of the iPhone 6 and iPhone 6 Plus.
Apple is facing increased competition in China from Xiaomi, a homegrown handset maker that has grown to become the third-largest smartphone company in the world by offering mid-tier devices at affordable prices.
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Apple's retail chief recently told Chinese news outlets that the company will open four new retail stores during the next five weeks, bringing its total locations in China to 20.
O'Leary anticipates those stores will do well, but he said the nagging concern about consumer electronics becoming commodities is keeping investors from overweighting shares of Apple.