Apple is sliding

Apple is off about 2% this morning, and down 10% after delivering a middling earnings report on July 21.

What are investors upset about?

Some possibilities:

• Chinese manufacturers are now beating Apple in China. This morning, research firm Canalys put out a note saying that Xiaomi and Huawei together were responsible for one-third of all smartphone sales in China in Q2, with about 16% share each. Apple fell to third place.
• Apple missed expectations on shipments for all its major products. In particular, investors were expecting a monster iPhone quarter, but Apple sold only 47.5 million instead of nearly 49 million. Analysts at Cowen saw this as mounting evidence of a slowing Chinese economy, which is particularly bad for Apple as it's depending on China to drive its next wave of iPhone growth.
• Microsoft's Windows 10 will provide more competition to the iPad and Mac. Analysts at Jeffries last week tried out Windows 10 on one of Microsoft's Surface 3 laptops and found it much better than Windows 8. Basically, Windows 8 was so confusing that Microsoft handed Apple a few years of free runway to build iPad and Mac sales in the enterprise. That free runway is over. Jeffries also thinks that Microsoft's virtual personal assistant, Cortana, will provide Google a run for its money while "Apple remains further behind in this area."
• What's next after the iPhone? Apple Watch sales outstripped iPad sales over a comparable time period, but sales have apparently tapered off after an initial boom. Apple Music launched to mixed reviews, including some pretty strong criticism by the company's biggest fans. But more to the point, Apple is clearly the iPhone company - and if iPhone sales start to flatten or drop, growth for the company will stall too. Apple has tacitly acknowledged this, adding a new risk statement to its 10-Q filing with the SEC, as pointed out by Morgan Stanley: "Further, the Company generates a majority of its net sales from a single product and a decline in demand for that product could significantly impact quarterly net sales."