Oh, how the mighty have fallen! Apple Inc. (NASDAQ:AAPL), widely regarded as the most popular company on the planet -- and it's hard to argue that point, given the cult following the company boasts -- missed revenue estimates slightly when it reported its first-quarter earnings results last week, and the stock was subsequently pummeled.

Since that report, we've seen statistical analysis out the wazoo of what's wrong or right with Apple: "Gross margins are down"; "iPhone sales dominated Christmas-quarter sales in the U.S. for the two biggest telecoms, AT&T Inc. (NYSE:T) and Verizon Wireless"; "it has $137 billion in cash."

Today, I intend to brush these statistics aside and break this down to the absolute basics of what's wrong with Apple Inc. (NASDAQ:AAPL). The way I see it, Apple's problems can be explained by three factors:

• It outgrew its supply chain.
• Competitors are copying its operational model with success.
• Our expectations as investors are flawed.

It outgrew its supply chain How can the formerly biggest company in the world fail if iPhone 5 preorders were off the charts? Very easily, if the supply chain isn't prepared to meet a monstrous increase in demand.

Back in September I labeled Apple's supply chain as the biggest threat to the iPhone 5 and, while it may not be apparent, I feel Apple Inc. (NASDAQ:AAPL)has grown so large that it's been cannibalizing its own production capacity. Apple has tried, unsuccessfully, to persuade Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) to give it more production capacity. Now here's the interesting part: Taiwan Semi's two primary customers are Apple and QUALCOMM, Inc. (NASDAQ:QCOM) . Qualcomm is the sole supplier of Apple's cellular baseband processors in the iPhone 5. Without a back-up for this component, Apple's sort of stuck in a nasty catch-22: stymie current production, or risk a shortage of Qualcomm's baseband processors if it can persuade Taiwan Semi to boost production.

In other areas, it isn't just a supply chain-sharing issue, it's a capacity issue. Hon Hai Precision, the parent company of Foxconn, the exclusive assembler of Apple Inc. (NASDAQ:AAPL)'s iPhone 5, admitted in November that the iPhone 5 was a very complex and time-consuming device to put together. This could be a reason why there were iPhone 5 supply shortages shortly after its launch. Sharp, one of Apple's three LCD display manufacturers, had manufacturing issues prior to the iPhone 5's launch, which made meeting Apple's demands nearly impossible.

Simply put, there's only so large Apple Inc. (NASDAQ:AAPL) can grow without supply chain issues becoming a repetitive problem. The more suppliers it attempts to add in order to boost potential parts supply, the less control it'll have over the manufacturing process and, worse yet, the less consistent the finished product could become.

Competitors are copying its operational model with success "Monkey see, monkey do" is the oldest form of legal business thievery around. We see it in the food sector with Burger King Worldwide Inc (NYSE:BKW) mimicking McDonald's Corporation (NYSE:MCD) menu of healthier food options and smoothies. We see it in merchant services where eBay Inc (NASDAQ:EBAY) introduced PayPal Here, a triangular shaped on-the-go card-swiping device that's modeled almost entirely after Square's credit-swiping device. And now, we see it from Microsoft Corporation (NASDAQ:MSFT) which has taken a page right out of Apple's own book and has been opening brick-and-mortar stores in high volume malls around the U.S. with notable success.

Let's remember that Apple Inc. (NASDAQ:AAPL) is just as much as software company as it is a hardware company, and Microsoft is looking for ways to find the bridge between the two. For Apple, that balance has been hit through its highly successful Apple stores which boast the highest sales per square footage in the United States. Microsoft is looking to hit that stride as well by burning the Microsoft brand into consumers' minds and allowing them closer access to its products than ever before. Between 2011 and 2014, Microsoft has planned to open 75 brick-and-mortar locations.