Apple reports earnings on Wednesday after the market closes. Investors are not expecting anything spectacular.
This table from Piper Jaffray analyst Gene Munster sums up analysts' forecasts.
As you can see, everyone is expecting low single-digit growth:
Analysts are saying that Apple is a "second-half" story. They say the new products are coming at the end of the year, and those are going to boost sales and reposition Apple as a groundbreaking, innovative company, not one that's iterating on its current line of products.
It didn't have to be this way, and really, it shouldn't be this way.
Apple should have seen this drop in growth coming, and been better prepared. It should have either diversified its existing product line or released new product categories to offset the declines of its current products.
This chart shows Apple's declining sales growth:
And the reason Apple's revenue growth has crashed is that growth of sales of the iPhone has cratered:
The iPad was supposed to be the next leg of Apple's business, but growth has also cratered:
These charts are not good for Tim Cook. He took over as Apple CEO in 2011 when growth was booming. Today, growth has leveled off. And it didn't happen suddenly.
Cook has been given the benefit of the doubt about leading Apple during this growth decline, but it's time to start seriously asking if he has been mismanaging Apple.
Cook promised new products were coming across 2014, but now it looks as if they're only coming in the second half of the year.
By the time new products from Apple hit, we could be looking at a run of quarters with sales growth in low single digits. Apple's growth shouldn't have gone to zero before Cook started rolling out new products. He should have been managing the business to address the coming decline.
The reason the iPhone business has fallen off is fairly straightforward. Apple sells a phone with a small screen that is expensive relative to its competition.
Cook, and his management team, is aware of this problem. An internal presentation at Apple last year showed that people wanted low-cost big-screen iPhones:
Here's another slide from that presentation:
And one more slide:
This presentation happened in April 2013. It's April 2014, and Apple has not fixed these problems.
Samsung started making a bigger phone in 2011. It wasn't a good phone, but it showed enough promise that Samsung made its next phone bigger, and the one after that bigger, until it landed at about 5 inches as the screen size that its users loved.
Apple prides itself on making the "best," most-innovative products. To be innovative, you need a vision for what consumers want. Missing on screen size means you've missed out on what consumers want.
That falls on Cook.
When analysts talk to Cook on tomorrow's earnings call, it's time to ask some hard questions. Why didn't he diversify the iPhone line? What is wrong with the iPad business? Why aren't there new products until the end of the year?
More than anything, it's time to question why growth has gone to almost nothing, and what Cook is doing to address it.