Apple Inc. (NASDAQ:AAPL)'s in trouble.

The stock has given back nearly a year's worth of gains after its third consecutive disappointing quarter.

I'll admit it. As hard as I have been on Apple lately, I didn't think it would crater today. The stock had fallen so sharply ahead of the report -- off nearly 30% since its all-time peak four months ago -- that I figured Mr. Market would take the lower earnings and margin contraction in stride.

It didn't.

This is a dangerous time to be long or short Apple Inc. (NASDAQ:AAPL). Both sides may have it wrong.

Bears are shouting "I told you so" at a time when Apple's stock is trading at historically low levels. Bulls are arguing that this is the mother of all buying opportunities, but didn't they say the same thing last week -- and the week before?

In order to understand why Apple Inc. (NASDAQ:AAPL) got here and to gauge where it may be heading, it's important to take a sobering look at some of the numbers in last night's problematic report.

Let's dive right in.

38.6% This may actually be the scariest number in Apple's report. Apple's gross margin fell from 44.7% a year ago to 38.6% during this holiday quarter.

Apple's move to offer the cheaper iPad Mini and shave as much as $200 off the consumer-facing price of older iPhone models helped prop up sales -- revenue rose 18% despite Apple having one fewer week this reporting period -- but it came at the expense of Apple Inc. (NASDAQ:AAPL)'s ability to mark up its products.

This may not change anytime soon. As Apple faces a glut of cheaper Google Inc (NASDAQ:GOOG) Android products and developers are left with little choice but to support both mobile operating systems, Apple can't afford its premiums.

Verizon Communications Inc. (NYSE:VZ) told investors this week that its wireless margin will improve. The only way that will happen is if Apple negotiates lower subsidies or if Verizon Wireless sells more Android devices. Apple knows the danger of ignoring the mass market. Its Mac computers were fringe high-end products for too long. Apple Inc. (NASDAQ:AAPL)'s going to gun for market share over margins, and it's why Apple's outlook for the current quarter calls for gross margin to clock in between 37.5% and 38.5% -- slipping again, sequentially.

4.1 million Apple sold just 4.1 million Macs. This is pretty surprising. It sold 5.2 million Macs during the prior year's holiday quarter. It even sold 4.9 million Macs during its most recent September quarter.

Supply was a problem. Apple Inc. (NASDAQ:AAPL)'s suppliers are surprisingly inept lately. However, it's also clear that consumers are no longer upgrading PCs the way that they used to. Wasn't it just a matter of time? The cloud computing revolution has made it less necessary to upgrade older desktops and laptops. This is brutal for longtime nemesis Microsoft (NASDAQ:MSFT), since the software giant has far more to lose in this paradigm shift.

Apple's cool with the cloud. It's perfectly fine with the "good enough" computing revolution that's favoring smartphones and tablets -- markets where Apple has greater sway than PCs -- over actual computers.

However, it's still a scary-low number. What happened to the "halo effect" that would lead to all Apple Inc. (NASDAQ:AAPL) sales thriving if one of them was a hit?