In my last post, I painted a very bullish picture for Apple (NASDAQ: AAPL) driven by the company's small-scale innovation and gigantic share buyback plan. Now it's time to look at the other side of the coin: Here are three reasons why you might reconsider a long position in Apple for the long haul. 

Margin focus not market share
Apple is definitely inclined to preserve its identity as a "premium brand." The company's recently unveiled line of iPhone and iPad products are priced for high-end consumers and the company's gross margins are unlikely to compress in the near term. Those are largely positive outcomes, but that strategy might not play out well in the long term. The market share of iOS has been attacked by phones running on Google's (NASDAQ: GOOG) Android OS. 

Google's CEO disclosed in the most recent earnings call that more than 1 billion Android devices have been activated worldwide and 1.5 million new activations are taking place every day. Those are staggering numbers for Android! Different manufacturers using Android's open source OS are appealing to the masses around the world making the market for devices very competitive. 

At the end of 2013 second quarter, the market share of iOS declined to 13.2% from last year's market share of 16.6% and the market share of Android increased to 79.3% from last year's market share of 69.1%, according to IDC. 

Apple's new iPads and iPhones will aid the company's revenue growth going into the busy holiday season. However, Apple's pricing of iPhone 5c will have a difficult time competing in the lower end of the smartphone market. If Apple products remain expensive the company's penetration rates will hit a brick wall sooner or later. 

Product refresh is good but not great
Apple's product launches have been pretty decent, especially going into the busy holiday season. However, the new line of iPads and iPhones do not have a "wow factor." The iPhone 5s and 5c are largely evolutionary product refreshes for the company, and is unlikely to be a game changer for the company's revenues after a few quarters of strong sales.

A lot of investors have been disappointed by Apple's pricing strategy because the company did not come up with a low-end phone. The company's iPhone 5s has been a stellar success and has been sold out and awaiting more supply. However, the relatively lower priced iPhone 5c got a weak reception from consumers prompting Apple to cut orders from component suppliers.

However, innovation still remains a challenge for Apple, and its competitors are almost certain to react to Apple's newly released items quickly. Apple faces intense competition in the tablet space from Amazon, Samsung and Google. Apple is still the top dog in the tablet market, one it created in the first place, but the company is losing market share.

According to IDC, Apple's tablet market share stood at 32%, which is a heavy decline from its year ago market share of 60%, and Samsung now holds 18% market share which is a notable improvement from its year ago market share of only 8%. With such intensifying competition, Apple needs to come out with major innovations to grow its revenues in fiscal 2014.

The Chinese market
The cut-throat competition in the devices business is making OEMs look like commodities. As a result, Apple is unable to reap the benefits of its premium brand in its second-largest market, China. Apple's market share trickled down to roughly 5% in China, making it the number 7 handset maker in the country, well behind Samsung and other regional rivals like Lenovo, ZTE etc. 

And if Apple continues to charge high prices for its products despite reasonably low manufacturing costs, the company will keep losing ground in the critically important Chinese market. Component and manufacturing costs of the iPhone 5c and iPhone 5s are roughly $173 and $199 respectively, according to estimates from IHS iSuppli. But the company is charging much higher prices for those phones. The iPhone 5c starts at $549 and the iPhone 5s starts at $649. 

At these prices the company will be unable to appeal to more consumers in China. Apple's revenues in the Greater China region in the last quarter declined 14% year over year. And going forward reigniting growth in China will be very important for the company. In addition, analysts and investors alike were very optimistic about Apple's ability to clinch a deal with China Mobile, but no deal has been reached thus far. 

Going Forward
In spite of the negative factors outlined above, Apple still has a lot of room to grow and innovate. The company should focus heavily on innovation and ramp up its R&D efforts to overcome competitive and regional headwinds. The company has a lot of cash with which it can heavily increase its research and development budget and grow its revenues to steal market share from competitors across the globe. 

Profit from Apple's destruction
Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.

Ishfaque Faruk has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.