Some Wall Street analysts predict an end of iPhone sales growth, shrinking iPad sales, and a tough year ahead for Apple
Apple is going to have a tough year — Suddenly, things aren't looking great for Apple in the near term. — Let's briefly run down why:
Context & Ripple Effects
This January 2016 call was the opening shot of a multi-year arc: Wall Street analysts flagging that the iPhone's growth engine was stalling just as the iPad was already contracting. Within months it stopped being a forecast — analysts expected Apple to post its first year-over-year quarterly revenue decline since 2003, down roughly 10% to $52B on shrinking iPhone sales.
What makes the piece worth revisiting is how the same diagnosis kept recurring: Above Avalon traced the miss to a slowing upgrade cycle that suggested iPhone growth wouldn't simply snap back, and years later Bloomberg argued Apple's China-and-saturation guidance downgrade punished the company for conditions that had been visible all along.
First-order effects
- Apple heads into its fiscal year with two core products decelerating at once — iPhone growth ending and iPad sales shrinking — putting the company on track for its first annual revenue decline in over a decade.
- Investors repricing Apple off iPhone unit growth rather than ecosystem strength immediately hit the stock narrative, since the product that drove the supercycle no longer has a growth story attached.
Second-order effects
- With upgrades stretching out, Apple's revenue base shifts from new-buyer expansion to replacement timing, making each quarter hostage to when existing owners refresh — the dynamic Above Avalon identified as structural, not cyclical.
- The credibility damage compounds: after the 2016 miss went untelegraphed, Apple's failure to warn again before the 2019 China downgrade taught markets to discount management guidance and lean harder on third-party supply-chain reads.
Third-order effects
- If the pattern holds, Apple transitions from a growth stock valued on device-unit momentum to a mature hardware franchise where even peak quarters merely match prior-year levels — exactly what the 2023 flat holiday-quarter guidance against Street expectations of ~5% growth shows persisting years later.
- Recurring saturation-and-China misses point toward pressure on Apple to find revenue outside handset units — services and pricing power over installed-base monetization become the load-bearing story once unit growth is gone.
The trend: Apple's iPhone-led growth era gives way to a saturated upgrade-cycle business in which the company repeatedly guides at or below Street expectations, forcing valuation to migrate from unit growth toward installed-base monetization.