Using Apple's numbers he calculated that while the overall smartphone market grew 36% during Apple's Q2 (which is calendar Q1). iPhone sales only grew 7% resulting in a market share drop from 23% of the global smartphone market to 17%.
Carrying those numbers forward and looking at Apple's revenue guidance he estimates Apple will sell 25 million iPhones this quarter which is 4% lower year-over-year. If the overall market growths 30%, Apple's share will be down to 12.3%.
Furthermore, if Apple doesn't release a new iPhone until September/October, Sacconaghi calculates that its market share could drop to just 9%.
"Perhaps most startlingly," he writes, "if Apple does not introduce a new iPhone or lower-priced phone in CQ3 [Apple's fiscal Q4], it is quite possible that iPhone's smartphone market share could drop into the single digits."
Despite this, the firm still has a outperform rating on Apple with a price target of $600. Here's why via Fortune:
● Apple's market share typically troughs before new offerings... Apple's share could increase dramatically with the introduction of a lower priced device, and meaningfully with the addition of new carriers. We estimate that adding China Mobile would boost Apple's global smartphone market share by over 100 bps [basis points] in the first year, and that a successful low end iPhone could boost share by 500 bps or more.
● iPhone is still growing healthily. As gloomy as these market share forecasts appear, we model iPhone unit sales growing 15% in FY 2013, and 10% in FY14, and our model does not include the introduction of a lower-priced device. Yes, Apple is growing at a fraction of the market – because it is not participating in the fastest growing, low end segment – but we still expect it to grow.
● The size of the total iOS ecosystem remains staggering on both an absolute and relative basis – and Apple's customer base remains intensely loyal. In short, iOS is in no risk of going away... Moreover, our consumer surveys point to iPhone repurchase intentions of over 90%, notably ahead of competing ecosystems, including Android.
● Market share does not necessarily correlate with profitability. Currently, Apple's iPhone positioning is increasingly mirroring the Mac, which commands just 5% PC market share, but is highly profitable, accounting for an estimated 40% of total PC industry profits.