Pacific Crest analyst Andy Hargreaves upgraded Apple to "outperform" this morning, citing the upcoming iPhone 6 as something that would pump up the stock.
In his note on Apple, he included this chart, which pretty much tells you all you need to know about the iPhone business.
Pacific Crest
The iPhone's growth is slowing considerably as Apple shifts from taking on new iPhone owners to selling upgrades to current iPhone owners.
The problem for Apple is that its market of smartphone buyers appears to be largely saturated. Apple sells a premium product to wealthy customers. Those people have bought their iPhones.
The growth in the smart phone industry will come from less wealthy consumers who buy $100 smart phones in emerging markets. That's not a market Apple wants anything to do with since there's no money to be made.
And in case you need a reminder about why this matters to Apple right now, here's a chart of how Apple makes money from Hargreaves:
Pacific Crest
So, what does this mean for Apple overall? Years of slow growth are ahead unless it releases a new product that radically stimulates sales.