When the iPhone 5 launched, it looked like Apple was on top of the world. The company’s stock hit an all time high with an individual share price of $702. Fast forward to today and the company’s individual share price is now sitting at $485. What happened, and can Apple fix it?

It’s easy to see why Apple’s stock was so successful in the months leading up the launch of the iPhone 5. The company was reporting record profits every quarter on massive sales of both of its iPhone and iPad product lines. The launch of the iPhone 5 was in itself a momentous occasion, but it all started to go downhill a little after that.

Only a month after the iPhone 5 launched, Apple announced the iPad Mini. The mini-tablet was Apple’s attempt to directly compete with Google’s Nexus 7 and Amazon’s Kindle Fire HD. First impressions are often ugly, however, and investors tore into it. The company’s share price stumbled to about $613-$615.

Since then, the iPad Mini has proven to be a smart move on Apple’s part. Early reports indicate that it’s doing incredibly well, and that it’s even more popular than the iPad. Why is Apple’s stock taking a beating then when everything seems to be going well? It’s because the iPad Mini is more popular than the iPad. Apple envisioned a world where consumers would buy both the iPad and the iPad Mini as a “sidearm” of sorts. Consumers are instead opting to only buy the iPad Mini. That cuts into the company’s profits as it makes less money per iPad Mini sold.

Of course, the iPad Mini only explains one part of the problem. The other problem has only manifested itself recently, and caused a sharp drop in Apple’s stock. A report from Monday said that Apple’s component orders were being cut by half in response to weaker-than-expected demand for the iPhone 5. The news cut through the company’s share price and dropped the price to below $500 for the first time in over a year.

It should be noted that $500 per share is an extraordinary accomplishment, and something that few companies can ever achieve, That being said, it’s rather worrisome to see a company’s stock drop by over $200 in less than six months. Analysts are still remaining optimistic, however, with Value Walk reporting that analysts at Nomura are maintaining a neutral rating for Apple with a target price of $530 per share. It’s below that price for now, but the idea is that Apple will be able to stabilize itself around that price in the coming months.

So how can Apple retain its position as the most profitable company in tech? It’s not exactly an easy prospect as the company has made a name for itself with investors by reporting monster profits every quarter, but that might not help the company sell as much hardware anymore. Following the lead of the iPad Mini, there are now reports of a cheaper iPhone for emerging markets. Apple denies the reports, but there’s enough evidence to say with confidence that Apple is looking to shake up the iPhone brand in some way in 2013. If it is indeed a cheaper phone, investors might not be pleased as it will mean even less profits.

As for everything else, Apple needs to focus on innovation instead of litigation. The company will argue that it’s only protecting the innovations it has introduced to market, but where were the new innovations in the iPhone 5? A slightly bigger screen and Passbook does not an innovative phone make. Android and hardware makers who leverage the OS are running circles around it.

The iPad isn’t fairing much better as Apple introduced a fourth generation iPad in the same year as the third generation was released. The only difference between the two was a faster processor. The company that Steve Jobs built has become too comfortable in its place as the market leader, and is inviting competitors to usurp it.

If Apple really wants to get back on top, it will have to start being a consumer technology company again. Engaging in petty corporate warfare with Google at the expense of its users isn’t going to win them any fans or investor support. For now, it should solely focus on its consumers instead of worrying about any outside threats or influences. Apple was at its best when Steve Jobs did whatever he wanted, and the company needs to recapture that defiant spirit.