As a result of losing over $200 billion in market value, Apple (AAPL  ) has now succumbed to its tech rival Microsoft (MSFT  ), whose market share stands at $838 billion and surpasses Apple's own market share by about $5 billion.

The primary reason for Apple's decline is that it has dedicated so much of its business to the sale of iPhones, which currently comprise 61% of total revenue - the market for smartphones worldwide is rapidly slumping as it becomes more and more fragmented. With this increasing fragmentation, Apple's share has been dwindling and it needs to diversify to mitigate market risk.

Moreover, Asian countries and the EU have lately cracked down on tech companies over violations of consumer data privacy and complex schemes to lower taxes. It doesn't help that Trump's imposition of tariffs on Chinese goods may cause Apple to shift the burden of taxation on consumers, since many of its parts are manufactured in China.

On the other hand, Microsoft has actually diversified, reducing the amount of focus it placed on its Windows software and instead shifting gears towards cloud computing.

Investor John Archer says: "To me, the proximate cause was the announcement during Apple's recent conference call that it will no longer report unit sales volume for its three most important products. Investors want as much transparency as possible so they can assess a company's strength and future growth prospects. The announcement was a clear dodge of management accountability because unit sales volumes for iPhone, iPad and Mac have been essentially flat."

Moving forward, the gap between Microsoft and Apple is expected to further widen. Microsoft's revenue is projected to increase by 11% while Apple's is only projected to increase by 5%. If Apple does not find industry niches to explore, waning growth in the smartphone sector may be a serious threat.