Apple stock dipped into bear territory today, tumbling by more than 1% to reach $105.95 per share to fall below its 52-week intraday high by more than 20%. The iPhone maker’s shares were a heavy weight on the NASDAQ Composite Index and the S&P 500 Index, both of which sat in the red for much of the day, but it wasn’t much better across the rest of the U.S. stock market as the Dow Jones Industrial Average was in the red too.

Apple Inc. (AAPL) Stock Nibbled On By Bears: How Low Can It Go?

iPhone 7 may not be a sure thing for Apple (AAPL)

The weak iPhone 6s cycle has called into question Apple’s Inc. (NASDAQ:AAPL) ability to keep growing its user base. This week there was another report that the company has decided to keep the reduced iPhone build plan it put in place previously. The company has cut iPhone orders multiple times this year, indicating that demand for the new iPhone 6s lineup is weak.

Analysts and investors alike are straining toward the iPhone 7 release later this year in hopes that it will be a vast improvement over the 6s cycle, but that might not be the case. Apple Inc. (NASDAQ:AAPL) management and multiple analysts have noted that there’s still plenty of room for growth among current iPhone users because only a relatively small percentage have upgraded to the newest models. But the question remains whether users think there has been enough innovation between the latest models and those released in recent years.

Typical Apple stock trading technique won’t work this year: DB

As much as some analysts want to see other products and the array of new services the company is unveiling have a major impact on Apple stock, the fact remains that it’s basically an iPhone stock. Deutsche Bank analyst Sherri Scribner notes that a very solid trading tactic for Apple stock is pumping up positions about six months before the numbered years’ releases and then selling or sometimes shorting them for about six months after the releases. She adds that this strategy hasn’t worked in S release years.

So with this year being a numbered year with the iPhone 7, does it mean the usual strategy will work? According to Fortune, Scribner warns that it might not because Apple Inc. (NASDAQ:AAPL) is just facing too many challenges right now. Among the challenges she sees are the ongoing deceleration in smartphone sales, slowing growth at the high end of the market, and limited penetration capabilities in emerging markets where high-end smartphones don’t sell as well as their cheaper counterparts.

She also noted that smartphone replacement cycles are lengthening despite the iPhone maker’s attempt to fight this last challenge with its new upgrade program. Scribner believes that the company’s valuation at this time reflects “long-term growth challenges, balanced by expectations for a trade into the iPhone 7 launch,” and as a result, she continues to rate Apple stock at Hold.

Services won’t boost AAPL’s results much

Other analysts have highlighted Apple’s new services offerings and argued that investors are undervaluing these services, but Scribner doesn’t believe they’ll do enough to move the needle at a company with such a massive heft as Apple Inc. (NASDAQ:AAPL) has. She noted that even with the introduction of Apple Music and Apple Pay, sales have only brought a “modest acceleration” over the last year, adding that sales per device actually fell 10% last year to $17. Further, the segment only makes up about 9% of total sales.

Apple Inc. (NASDAQ:AAPL) has been dealing with the law of large numbers for years, and as the S&P 500’s most valuable company by market capitalization, the stock faces a challenge unique to companies in such a position as this. She said investors have historically given the index’s most valuable company a valuation that’s below average.

Apple Inc. (NASDAQ:AAPL)’s market value is greater than 3% of the S&P 500, and Scribner believes that ownership is more limited here, which is why the stock that’s at the top of the heap can’t trade at market multiples.