Apple Inc. (NASDAQ:AAPL) is considered one of the untouchable names in consumer technology, but is its luck running out? AAPL stock has begun to do some ugly things of late, down some 7% from its early June peaks, and really not showing any signs of life.

It’s the kind of performance that, as it has several times, forced investors to worry, and ultimately one of the terms that comes up is “peak smartphone.”

Peak smartphone is a trendy way of saying “market saturation”; there’s simply too many portable devices for consumers to choose.

Apple Stock Hurting Right Now

Recent volatility is unlikely to have a serious impact on ardent Apple bulls. They’ve seen significant turmoil in the iPhone maker, far exceeding the pain we’re witnessing right now. Each and every time, AAPL stock has bounced back, seemingly taunting those who dared question its dominance.

Yet no organization is invincible, no matter how strong the balance sheet or how superior the product. Indeed, AAPL stock holders might be learning this lesson the hard way.

First, to see a worse performance than what Apple went through in the aftermath of June 9’s wide tech reaving, we would have to go back to April 27, 2016. At that time, Apple shares dropped more than 6% against the prior session. June 9 was a rare one-day blow.

More critically, bears are starting to smell blood. Bloomberg reported that the upcoming iPhone 8 wouldn’t operate as quickly as its competitor models. As a result, analysts downgraded AAPL stock.

Business Insider noted that “Short interest on Apple has climbed by $1.3 billion since May 15.” Apple became the U.S. stock market’s third most-shorted company, behind Tesla Inc (NASDAQ:TSLA) and Alibaba Group Holding Ltd (NYSE:BABA).

That seems like a rather excessive response to a single product’s predicted shortcomings. Of course, it could be worse …

Peak Smartphone Is Here

The concept of peak smartphone is not a new one. Back in July 2013, Forbes ran a piece detailing fears that smartphone manufacturers could no longer justify their business plans. The mantra at the time was that anyone who wanted a smartphone, particularly an Apple-branded one, already had one. Interestingly, AAPL stock only returned 5% in 2013, although it walloped the markets the following year with a 43% return.

But in recent years, peak smartphone has returned as a legitimate worry.

According to Statista, smartphone sales in the U.S. this year are expected to hit $55.6 billion. If so, that would only represent a modest 1% increase from last year. And 2016 was hardly a banner year, with total sales gaining a mere 4%.

I argue that peak smartphone began in 2015. Since that year, sales growth is averaging 4.4%. In contrast, both the infancy phase (2005-09) and the expansion phase (2010-14) averaged 34% growth.

The risk to AAPL stock is that without broader growth in smartphone sales altogether, that leaves Apple needing to take share away from the competition — a difficult proposition given the iPhone’s oppressive price tag, which just keeps getting higher.

That doesn’t mean Apple can’t hold on to what it has, but significant growth becomes a problem when the total growth in smartphone sales is plateauing. CCS Insight says peak smartphone in the North American and western European markets will plateau this year “before falling to lower levels.”

The research unit calls it a “new phase of maturity.”

Developing markets, though growing, are not necessarily a panacea for AAPL stock. CCS Insight specifically noted that Apple products are “out of reach for many people” in countries such as China and India. Instead, most of the growth is going to companies serving middle- and lower-class incomes.

AAPL Must Adjust or Languish

Apple could surprise us like they have done so brilliantly in the past. But this time, even Isaac Newton is against AAPL. The Next Web’s Owen Williams argued that all consumer tech companies are fighting a losing battle against physics.

In particular, Moore’s Law, “which dictates that transistor density should roughly double every two years,” is no longer reliable. Allegedly, Intel Corporation (NASDAQ:INTC) was the first company to openly admit that it had extreme difficulty in reducing the size of its chips.

Translation-wise, consumer tech manufacturers can no longer rely on physically perceptible changes. For Apple, this means that the iPhone is about as thin and aesthetically pleasing as it will get. Now, it must rely on more technical attributes — such as sensor capacity or battery improvements — to distinguish itself.

This is colliding head-first with peak smartphone. Without being able to garner a physical edge, Apple products will begin to look nearly identical to competitor models as they start to catch up. If the Bloomberg report about slow operating speeds plays out, then, Apple really has an issue.

This isn’t an open invitation to short Apple. This is me suggesting a rethink.

For AAPL stock to thrive in the peak smartphone era, Tim Cook & Co. must dig deeper than they have in years. That might include going cheaper — but past dalliances with lower-cost iPhones haven’t been a smash success, either.

Investors need to consider this in their risk-reward assessment.

As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.