The signs are all over the place for a massive Apple setback, a perilous situation in that the company’s stock is down some 25% from its peak already.   Overnight, the Wall St. Journal has reported that Apple has cut its orders for components for the iPhone 5 in half due to weaker-than-expected demand.

Apple’s orders for iPhone 5 screens for the January-March quarter, for example, have dropped to roughly half of what the company had previously planned to order, two of the people said.

A giant of technology, Apple maintains the position as the most valuable and profitable company in the world, still the implications of a failed iPhone 5 could be the beginning of a slip from that status, as pressures mount up from all angles of their business.  In fact if we take a peek at the 6-month Apple Insider trade activity, it is very curious that there were 0 shares of stock buys by Apple insiders.  There were 164,559 shares sold during the same 6 month reporting period.  At the very least it indicates that Apple’s value at this time is very public investor-centric, which is very fickle and reactive.  The big money investors, the players play for the long term, the big picture – Is this a sign?  It could easily be read into this that this is a company  on edge.  Without a doubt Apple is filled with excellent design and engineering teams, but Wall St. can be brutal as can many factors and realities.  Let’s deconstruct Apple’s major business lines.

iPhone Status

There was a time when the notion of anyone speaking to another smartphone that was as good or better than the iPhone was not really serious.  The iPhone was far and away the leader.  Reports have emerged that in the last three years Samsung has sold 100 million of its popular Galaxy S smartphones – that means 100 million phones that Apple did not sell.  That is their main competitor, but there are other elite smartphone offerings that have refined their game and coming to market over and over again with significant offerings.  There is a real fear that Apple may fall behind when the Samsung Galaxy S4 soon becomes available, which many people are highly anticipating.  Perception is reality and that is a problem for Apple in that as good as the iPhone is, they have lost that image as the undisputed best in class at least in some minds.

New iPhone Help on The Way

Rumors also abound of a low-cost Apple smartphone offering, and reports of new phone in testing, Apple must be feeling significant pressure to produce something out of these developments sooner than later.  Low-cost phones could mean they are competing against themselves and further diluting the product line.  It also means tougher business margins.  A new flagship smartphone has to deal with the pressure that it has to exceed the other products on the market and do so convincingly for some time to come.  They no longer enjoy the comfort of the position they had even a year ago.  The competition is that fast, that good, and that successful.

Tablet d’jour

The tablet market is another intense pressure point.  While the iPad still leads this market, their competitors are often the same as those in the smartphone market, with Google, Samsung, and Microsoft having their sights directly on gaining share of mobile computing.  Apple also hastily entered into the mini-tablet category to contend with the likes of Amazon’s Kindle Fire.  In doing so, Apple ventured into a territory of devices that has slimmer profit margins and the resulting product, and iPad mini showed the various reduced features that Apple had to eliminate to get to market.

Apple TV – in vapor form

We also keep hearing, and as Tim Cook has alluded to – that an Apple TV could be on the way.  Thus far the buzz has kept afloat, but the product seems so far off that competitors are already jumping to beat Apple to the punch and in doing so, making Apple’s challenge that much harder.  The TV market is very competitive and different than the smartphone or tablet market.  The margins are cut-throat, retail strategy and experience is enormous, – Apple is not inventing a market here as they did with smartphones and tablets.  The pressure to put out a successful product with an Apple TV is pretty critical and precarious venture for the company.  It is very difficult to attain leadership in a tech industry, but it can be even harder to maintain it and strategy, analysis, and research are key to making the right decisions to keep that up.  It remains to be seen how this Apple TV thing is executed because thus far, teasing that something might be coming has not helped Apple’s situation.