For years, Apple (NASDAQ:AAPL) seemed like the perfect company. It was a best-in-class business that led the way in many new and exciting markets, such as smartphones and tablets.

In recent years, though, it has become somewhat controversial. Bulls often argue that Apple's best days are ahead of it as it continues to profit from the iPhone, while aggressively expanding into new markets. Bears point to the increasing commoditization of Apple's core products and how Apple's other growth initiatives can't compensate for the slow growth (or even declines) in its core businesses.

Let's let the bears have their say. Here are three reasons investors might want to avoid Apple's stock at this time.

Apple's iPhone SE.

Image source: Apple.

1. iPhone is peaking

There was significant expectation going into Apple's current product cycle that the introduction of the iPhone X -- Apple's first totally redesigned smartphone in years -- would spur a so-called "super cycle" in which current iPhone customers would accelerate the pace at which they upgraded to the new models. But that super cycle isn't happening. Apple reported a slight year-over-year decline in iPhone unit shipments last quarter and there have been numerous credible supply-chain reports pointing to sluggish performance of the iPhone X in the marketplace.

Apple's upcoming iPhone lineup, which is expected to launch later this year, is anticipated to strengthen the company's offerings at lower price points, while also boosting its competitiveness at the very high end of the market. There's a good chance that Apple's iPhone sales performance in the coming fiscal year will be better than it's turning out to be in the current fiscal year.

Nevertheless, over the long term, it's not clear if generational improvements in the iPhone will be able to drive increased sales. At best, they may simply allow Apple's iPhone shipments to remain roughly in place.

Considering that iPhone sales made up 61.6% of Apple's revenue in its last fiscal year, a slowdown in iPhone growth is discouraging.

2. Apple's lack of product leadership

Apple CEO Tim Cook has often talked about the company's goal of building the best products in the industry. The reality, however, is that while Apple was once a clear innovator in the smartphone market, it's being surpassed in many key areas by seemingly hungrier competitors.

Apple's iPhone X, for example, is far behind the state of the art in mobile-camera technology, and the phone is also losing its edge in display technology. If Apple wants to continue to maintain the share of the premium smartphone market that it enjoys, let alone try to grow it, it needs to be better at fielding true leadership products that remain leaders throughout the entirety of a product cycle.

I'm losing faith that Apple will be able to deliver on that, particularly after seeing how the iPhone X's competitive positioning eroded so quickly after its delayed launch.

3. Increased competition from cheaper smartphones

In addition to Apple facing fiercer direct competition in the premium smartphone market, the reality is that mid-range and high-end smartphones are becoming increasingly capable with each passing year. Although premium phones are becoming more capable, too, we're arguably reaching the point of diminishing returns with respect to the difference between a high-end smartphone and a premium one.

For example, there was a report back in October in which one analyst claimed that Apple's discounted iPhone 7 was outselling the then-new iPhone 8 in the United States. The iPhone 8 is an objectively better device than the iPhone 7 -- the former has a faster processor, better camera, superior display, faster wireless capabilities, and so on. However, a large swath of potential iPhone buyers apparently thought it made more sense to go with the cheaper device, presumably because it was "good enough."

Apple faces the risk of cheaper, "good-enough" devices becoming better with each year, eroding the value proposition of its premium-priced products.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.