• by P.J. Bednarski  @pjbtweet, December 4, 2018

Erwan Rambourg, an analyst at HSBC who follows Apple, today issued a brutal view of the tech giant, sending the stock downward and putting wrinkles in the company's marketing future.

“Apple’s iconic hardware unit growth is broadly over for now,” he writes. “Revenues are only supported by higher selling prices and by the development of services. Flat unit growth has hit Apple’s share price and incidentally its key suppliers. 

“What has made the success of Apple, a concentrated portfolio of highly desirable (and pricey) products is now facing the reality of market saturation.”

With that, HSBC downgraded Apple to “hold” from “buy”  and chopped its 12-month price $5 per share, to $200. Apple, which started the trading day at $184.82, was trading at $177.78 at about 2 pm. Tuesday, but it’s a down day overall on Wall Street. 

Apple has been exhibiting some un-Apple-ish behavior recently. Parts of its marketing staff are now re-assigned to specifically push iPhone sales, reports the website ZeroHedge.com. It is now pushing trade-ins of old models for new ones and some obvious discount deals on the new iPhone XR. 

Rambourg says Apple’s path to better times again is to concentrate on its high-margin service businesses: the App Store, Apple Care, Apple Pay, iTunes and  cloud services.

“We see no unit growth for the iPhone,” Rambourg told Bloomberg News today. And while he said Apple still has a certain glow for some consumers in the U.S., U.K., Australia and Japan, he thinks aggressive Chinese smartphone competitors in huge emerging markets like China and India will be tough to beat. 

Part of Apple’s challenge there is the affordability issue. While Apple may sell well to high-income earners in emerging markets, there just aren’t as many of them to woo.

Three weeks ago, Guggenheim Securities also lowered its expectations for Apple, taking it from a “buy” recommendation to “neutral.”  And on Monday, audio chip supplier Cirrus Logic, which gets most of its revenue from Apple, trimmed its forecast, citing “weakness” in the market.

Apple, like other smartphone makers, is also feeling the effects of a mature market for many of its devices. 

“There’s evidence there’s a certain saturation in certain markets,” Rambourg said, as the smartphone market moves “from recruitment to the replacement cycle.” And he said, the “incremental innovations” in newer iterations of Apple phones don’t seem to be as eye-popping as in the past.