Remember when Apple was the world’s most valuable company? (Two months ago) Or when it became the first trillion dollar American public company? (Five months ago.) Well as of this morning, Apple sits in the No. 4 spot on the valuation charts ($675 billion), having fallen yesterday past Alphabet ($710 billion) and Amazon ($734 billion). Microsoft, at $748 billion, retains top honors.

The drop followed Apple’s surprise announcement Wednesday that it was cutting its sales projection for the quarter ended in December to $84 billion from earlier estimates of $89 billion to $93 billion. CEO Tim Cook’s stated reason for the decline was macroeconomic weakness in China. That’s a legitimate partial excuse, and enables him to pass some of the blame off on President Trump and his trade policy. But a number of analysts and sharp-eyed journalists raised concerns yesterday that the fundamental problem may be that Apple’s high-price strategy is reaching its limits. A sampling:

From Toni Sacconaghi of Bernstein Research:

“Apple failed to acknowledge the possibility that current iPhone prices are simply too high (stunningly, we note that iPhone prices are nearly 5x higher than the average non-Apple smartphone sold globally). Moreover, we believe that the high-end smartphone market is fully mature with structurally elongating replacement cycles, which we maintain is the company’s key long-term challenge.”

From Dan Ives of Wedbush:

“Clearly Apple’s darkest day…Cupertino now faces the biggest fear among bulls, which is an installed base…that could stall out and not grow over the coming years and, in a nightmare scenario, decline.”

From Shira Ovide of Bloomberg:

“This should have been absolutely predictable to anyone who was able to peer outside of Apple’s bubble. Executives have failed in their duty to warn investors ahead of time about all this, and reality is finally and all at once catching up to Apple.”

And finally, from analyst Neil Shah:

Apple’s China struggles arose because of “insane pricing which has backfired…Apple still is in a great position & needs to re-calibrate its pricing vs. value (proposition) strategy.”

More news below.

Top News

BMS Buys Celgene

In one of the biggest pharma takeovers ever, Bristol-Myers Squibb is paying $90 billion for Celgene, a company specializing in leukemia treatment. BMS thus far has a focus on solid tumors. Celgene CEO Mark Alles said the two companies had "complementary assets in different diseases and here we get to build on the scientific capabilities of both in a way that could not happen without this deal." Wall Street Journal

China Talks

The Chinese commerce ministry announced new talks with the U.S. early next week, and there was also healthy new data from the Chinese services sector. Chinese markets responded positively, with the Hang Seng and Shanghai Composite indices jumping around 2%. U.S. futures look sunny, too. The Nikkei, however, fell by more than 2%, with Softbank taking a 2.89% hit. CNBC

Debt Ceiling

The Democrats are resurrecting the Gephardt Rule, which would stop President Trump from engineering a debt-ceiling drama that could tank the markets. The rule was in place from 1979 to 1995. It essentially means that when Congress adopts a budget resolution, it automatically authorizes the raising of the debt limit that is required to enable that spending. Bloomberg

Apple Bans

Qualcomm's patent assault on Apple last month led a Munich court to order the removal, for now, of iPhone 7 and 8 models from store shelves in Germany. Qualcomm has paid the necessary bond now, so the ban goes ahead. Meanwhile in China, the "Anti-Infringement and Anti-Counterfeit Innovation Strategic Alliance" is urging Apple to respect a similar ban. BBC

Around the Water Cooler

Herb Kelleher

Southwest Airlines founder and chairman emeritus Herb Kelleher has passed away at the age of 87. As Fox Business notes: "Kelleher was known for his sense of humor and colorful personality which became a thread of the airline's corporate culture." Fox Business

Huawei Tweet

Huawei has demoted two employees over the tweeting of a New Year's greeting from the company's official account—from an iPhone. These things show up on Twitter, and it proved embarrassing for a firm that's vying with (and currently ahead of) Apple regarding the number two spot in phone shipment rankings. The culprit was actually a contractor, but it seems heads had to roll back at HQ, too. CNBC

Credit Suisse Scandal

U.S. prosecutors have charged three former Credit Suisse bankers, plus Mozambique's former finance minister, over a 2013 deal that saw the latter country borrow $2 billon without the full knowledge of the IMF. The loan, which collapsed, was for projects that turned out to be suspect. Financial Times

AI Strategy

Finland has a small population and it knows it's never going to be in the same league as the U.S. and China when it comes to AI development. So instead, the country is trying to train its citizens on the use of AI, initially by educating 1% of its people about the basics of the technology. Politico

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.