When I wrote about Affymetrix (NASDAQ:AFFX) a year ago and suggested that the stock was too expensive and that the company had more competition than some people might realize, you would have thought I'd shot the Easter Bunny and made it into hasenpfeffer. Since then, the stock has gotten chopped down by more than half and sales have been hurt by competitors. Huh, I guess price and competition may just matter after all.

This quarter didn't offer up much in the way of good news, either. Overall revenue dropped 5%, product revenue fell 6%, and the company once again missed guidance on the bottom line. As you might imagine with this sort of company (a razor/razor blade business model with significant operating leverage), margins were weak beneath the lower sales performance.

Speaking of competition, management cited that as a primary issue this quarter. When you look around the sector and see how well rival Illumina (NASDAQ:ILMN) did this quarter (within 10% of a 52-week high), you see part of the problem. In response, the company announced that it's cutting the price of the 500k GeneChip to about $250. That'll hurt margins in the short run, but it should help preserve marketshare ahead of the launch of a next-gen system that should help get revenue growth going again.

Affymetrix is still a leader in gene expression technology, but this market is getting more like regular ol' diagnostics. That's not terrible -- companies like Beckman Coulter (NYSE:BEC), Roche, and Invitrogen (NASDAQ:IVGN) have built good businesses -- but it does speak to the "it's different this time" syndrome that has been an issue with this company in the past. There is plenty of money left to be made from genomics and proteomics, but the rest of the industry is not going to just cede it all to Affymetrix.

Despite all of that, I'm more interested in this stock now than I have been in quite a while. I get very skeptical of technology leaders when investors begin assuming "it's different this time" and push the stocks up to unrealistic levels. But I get very interested when those same investors get disillusioned and bail out. It's not uncommon for the misevaluation to swing completely the other way and a company with legitimate technology and competitive products to be treated as though it's out of the running. While I would expect the going to be tough for Affymetrix for a little while yet, opportunistic investors should keep an eye on this one.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).