I've used a bit of artistic license with the colours and sort of made it look like there's a bite out of it.
I got the inspiration from a similar apple like pin cushion on
<a href="http://www.mylittlemochi.typepad.com">My Little Mochi</a> (I think).
Cut two apple shapes from the white felt.
Cut out a leaf shape out of the red felt.
Sew on the lace.
Cut out an oval shape from the red felt, cut another oval shape from the white the same size and cut away to make it look like a core, cut little bits of white for the pips and sew together, then sew onto the peice of felt with the lace on.
Sew the leaf onto the back peice of felt onto the side facing you so that when it's all sewn up it will be securly inbetween both peices of white felt. Sew both peices together and put in some stuffing before completely sewing it up. And done!