Possibly a graft failure.

Is the top healthy?

Two things come to mind. 1. Was that tree repeatedly hit with a weed whacker when it was young? 2. Borers can get inside and bore outward...wrecking the insides of the main trunk. I jjust cut down my unhealthy "Anna"...and it was hollowed out inside by borers.

I notice how close your mulch is to trunk. Small animals and insects play havoc in winter around base of my trees so I don't put mulch so close to truck base.

Thanks for your comments. I've attached more pictures. The top looks so-so. Actually, the leaves seem better than a month ago when they had more brown splotches. It has been hot here in Chicago, and I think some of them are sunburned. The tree is several years old - we planted it in its current spot 3 months ago. It actually bore 3 apples on one of the grafts this summer. We probably should have not let it bear the fruit, but we couldn't resist.

You are right about the mulch - I have moved it farther away. I have seen ants around the base of the trunk, and also squirrels in the tree itself.

Thanks again for your thoughts.

Here's some more info about this problem for those who may be interested. Apparently it is a bad idea to plant apples near serviceberries due to borer issues...

http://forums.gardenweb.com/discussions/3387485/m=23/found-this-larva-in-my-apple-tree-trunk-could-it-be-the-problem