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But analysts at Cowen and Company say to relax about Apple stock. In fact, analyst Timothy Arcuri writes, a slow 2016 might simply be setting Apple up for a "powder keg" 2017.
He writes:
"Our recent AAPL upgrade, however, is on the view that iPhone 7 is simply a 'bridge' to get to a 'super-cycle' for iPhone launch a year from now."
Let's break this down:
Cowen estimates that Apple will sell about 75 million iPhones in the rest of 2016, which means that Apple will essentially sell as many iPhones in 2016 as it did last year.
Given that the iPhone is the growth engine for Apple, that's bad news for the stock.
But here's the good news for Apple: in the next five quarters, Cowen estimates that 43% of iPhone users will be on a device older than two years, and will be ready for an upgrade.
And Cowen acknowledges the rumors that Apple is preparing a very sweet iPhone upgrade with an new screen using OLED technology for the 2017 cycle, which it thinks is setting Apple up for a huge upgrade cycle. Acuri writes:
"While iPhone 7 still looks about flat with iPhone 6S and macro risk is clear, our new installed base analysis suggests a 'powder keg' is forming. Against a backdrop of a new OLED-enabled form-factor in '17, this argues that either 1) iPhone 7 is better than expected, or more likely 2) a 'super-cycle' is setting up for iPhone in '17. Given risk/ reward of 4:1, it pays to get involved and wait it out."
Cowen says that although Apple's downside is "low $80's" it believes that it makes sense to buy into the stock before the 2017 "super-cycle" starts.
Apple was up 1.68% to $95.59 during trading on Tuesday.
Cowen gives Apple stock an outperform rating and a price target of $125.