Tech giants have had a pretty miserable time of late. Honors for the biggest fail went to Microsoft, which wrote off almost $1 billion on unsold Surface RT devices, while at the same time watching helplessly as its PC business continues to wither. Intel and AMD also took a hit for the very same reason, while even Google saw a slowdown in growth thanks to a reduction in ad rates. Which is why it’s no surprise to see Apple report a fair-to-middling quarter at best – while it avoided a decline, its growth remained essentially flat.

Keeping Apple’s head above the water was its off-the-chart iPhone sales, which blew away analysts’ expectations of 26.6 million units sold, rising nicely to 31.2 million. This also meant that Apple saw its overall mobile market share increase in a number of markets, including the US. This key stat gave CEO Tim Cook the confidence to state that analysts are well off the mark with their claims that sales of high-end smartphones have hit their peak – although, it’s only natural that Cook would want to dismiss this seeing as how Apple’s entire product line is high-end. According to the company, its most recent model the iPhone 5 was “by far” its best selling device, in contrast to earlier surveys which claim that it only accounts for around half of all iPhone sales. Apple didn’t release exact figures for each device, so we’ll just have to take their word for it…

Unfortunately for Apple, the “good” news was offset by a disappointing performance in other key areas of its business. Worst hit was the iPod, which saw sales tumble by 32% – this wasn’t entirely unexpected though, as the music player has been declining for some time, essentially a victim of the iPhone which offers everything it does plus a whole lot more.

Even more alarming for Apple will be its iPad line, where sales fell by 3% after an inventry adjustment. It totaled 14.6 million units sold, which was well short of the predicted 18 million sales from most analysts.

Finally there’s the Mac, which managed to retain flat revenues despite seeing sales decline by 7%. Reason for this was that Apple sold plenty of higher-priced premium models featuring its new Retina Display.

Analysts Opinion’s Divided

Okay so Apple’s sales aren’t getting any better, but at the same time they’re not getting any worse – so what does this mean for Apple?

Surprisingly, most reports have been pretty upbeat, with analysts suggesting that the performance shows the iPhone maker can withstand an attack from low-end smartphones. Concerns among investors that Apple might be dragged into a prolonged slump have been soothed, with many remaining optimistic that it can do even better with a refreshed product line up next year.

Brian Blair of Wedge Partners in New York told Bloomberg that he was full of confidence:

“The bad news is in the rearview mirror. What we’re going to see from here on out is numbers going up across the board for a couple of quarters. We’re going to see a product refresh and the kinds of things that get investors excited.”

Note everyone shares that optimism though. In a research note published on Wednesday, Artur Pylak of Sector & Sovereign Research noted a number of troubling trends developing in Apple’s business model:

• iPhone units were 19% above projections, but ASPs were down 5.2% QoQ. iPad units were 16% light vs. expectations and last year, clear share loss in a fast growing market.
• This is 3 straight quarters of sales deceleration and 5 quarters of falling margins. Margins dropped despite the positive mix shift toward iPhones. International sales were off hard.
• 2014 consensus expects 12% sales growth and a recovery to 37.5% gross margins. Given the current trajectory and tough competition, AAPL needs an easier target.

Pylak added that these trends were something that should concern investors:

“There are ample signs that the business model is beginning to come apart. This was the fifth consecutive quarter of declining gross margins, with guidance on the table suggesting further declines in the September quarter. Indeed, the mix shift toward the higher margin iPhones and away from the lower margin iPads OUGHT to have resulted in good margin news for 3QFY13. Sales were flat vs. the year ago quarter, a level considered disappointing even then, and decelerated for 7th quarter in the last 8.”

“Amazing New Products” to the Rescue?

None of this takes into account what Apple has up its sleeves for the next 12 months though. Rumor has it that it could be about to push into several new product categories, with the so-called iWatch and Apple TV (which could be a stonking 4K TV, a new set-top box or even just a thingamajig like Google’s Chromecast) the two likliest devices to rear their heads.

“We are laser-focused and working hard on some amazing new products that we will introduce in the fall and across 2014,” was all Cook would reveal on the matter.

It’ll also be interesting to see what impact another new Apple device could have on the company’s fortunes. If its current iPhone sales are anything to go by, Apple’s long-rumored ‘low-cost iPhone‘ could well make a big splash – plenty of people shell out everything they have to get their hands on its high-end handset, and so there’s every reason to believe that those who can’t quite make their budget stretch that far will find a cheaper iPhone more appealing.