Apple’s iPad sales are going to get crushed in the March quarter of 2015, according to KGI Securities analyst Ming Chi Kuo.

In a new report, Kuo forecasts Apple sells 9.8 million iPads in the first calendar quarter of the year. That would be a 40 percent drop on a year-over-year basis.

In his note, picked up at 9to5Mac and Apple Insider, Kuo blames the dramatic decline in iPad sales in 2015 on “a lack of new applications, tablet market saturation, and slow season.”

For the current holiday quarter, Kuo is forecasting Apple sells 21.5 million iPads, which would be an 18 percent decline on a year-over-year basis.

Kuo is the best Apple analyst in the world. He nails Apple product releases. He’s plugged into Apple’s supply chain, which likely influences his forecast for the iPad in the next two quarters.

If this is an accurate prognostication, it is a stunning demolition of what was once believed to be the next major business line for Apple.

It’s not going to hurt Apple too badly in the near term because Apple is the iPhone company and iPhones are selling like crazy. But in the big picture, it’s not good for Apple because it wants to be a diverse company with many growing business lines.

Why has the iPad gone negative? There’s no single satisfying answer. It seems to come down to a few things. 

“People hold onto iPads longer than they do a phone,” CEO Tim Cook said on the company’s earnings call when asked about iPad sales. “We’ve only been in this business four years. We don’t know what the upgrade cycle will be.”

He also said that some people might come into Apple’s store and choose a Mac instead of an iPad, he’s “okay with that.” 

Further, smartphones are getting bigger and bigger screens, thus negating the need for a tablet. 

This story originally appeared on Business Insider. Copyright 2014


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