I’ve been bearish on Apple (NASDAQ:AAPL) stock for some time, but I certainly did not anticipate the sudden drop. Since early October, Apple stock has gone from $232 to $176, wiping out more than $240 billion in market cap. In fact, Microsoft (NASDAQ:MSFT) has taken the No. 1 spot for the most valuable company in the U.S.

Now, the recent tech wreck has definitely been a major contributor to the downward move in AAPL stock. The markets are undergoing a rotation as valuations have reset. There are also lingering worries about interest rates, U.S.-China trade and global growth.

But there is more to Apple then just the overall markets.  The iPhone franchise, for example, is perhaps the most worrisome issue. The new line-up of phones is underwhelming, with only a handful of features like new cameras, larger screens and better performance. There really are no must-haves that should help juice up sales.

So in the latest quarter, AAPL reported soft guidance and the company announced that there will no longer be disclosures on the sales for the iPhone, iPad and Mac. Instead, all these will be combined into one revenue number.

iPhone Blues

Keep in mind that China is getting much more competitive, with fierce rivals like Vivo, Oppo and Xiaomi. They have been able to effectively match AAPL on features as well as offer their own innovations. What’s more, these rivals generally have lower pricing. These advantages have not only resulted in market share gains in China but also in other countries in Asia.

Oh, and the U.S. market is also getting more competitive and saturated. Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) Pixel 3 has been getting lots of traction and is being backed up with an aggressive marketing campaign. Next year, Samsung will release its latest phones, which will put more pressure on AAPL.

Then there is the potential impact of tariffs. Recently President Donald Trump noted that he may impose a 10% hike on Apple products. True, he can be mercurial and this may ultimately be a negotiating gambit. But if there is a new tariff, it would just be another headache.

OK then, but what about Apple’s services business? Won’t this help with the problems of the iPhone?

Well, I think so.  Services have been a nice growth driver. But then again, there are some risk factors. First of all, major companies like Netflix (NASDAQ:NFLX) and Spotify (NYSE:SPOT) have been finding ways to avoid paying the 30% fee from the Appstore. Next, the U.S. Supreme Court announced that a lawsuit regarding the potential anticompetitive nature of this platform could go forward. In other words, there may ultimately be pressure for AAPL to lower its fee structure.

Bottom Line On AAPL Stock

All this is not to somehow imply that the situation is hopeless for AAPL stock. The company is in no way headed for an implosion, like we saw with BlackBerry (NYSE:BB) or Nokia (NYSE:NOK). AAPL is still innovating and has a massive ecosystem.

However, it is far from clear how the deceleration in the iPhone will play out.  Hey, with Apple no longer disclosing the number, it has made things even worse!

But as seen with reports from major suppliers like Qorvo (NASDAQ:QRVO) and Lumentum Holdings (NASDAQ:LITE), the situation is looking a bit scary.

So even though AAPL stock is at a much more attractive valuation — with the price-to-earnings ratio at 15X — I think the shares could languish, as there could more bad news in the coming months.

Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.