Analyst: Apple Needs to Innovate Now!

Bluefin Research Partner’s John Donovan has become one of the more recent analysts to bring down his sales projections for Apple (NASDAQ:AAPL), Barron’s is reporting.

Donovan brought his quarterly iPhone sales numbers down by one million, to 36 million units, and lowered his iPad sales projections from 20.5 million units to 19.6 million. In defense, Donovan claims the “iPhone growth engine stalled,” and that with “a need for innovation,” the need for a cheaper iPhone is more important.

“A low-cost iPhone product to more accurately serve the replacement/upgrade segment versus the new user opportunity may be necessary to continue AAPL’s ascension in the smartphone market going forward.” Donovan said in a note. “Growth in this segment will be challenging in the U.S. as the company holds more than 50 percent of the market today, thus focus is shifting overseas, particularly to China. While Apple’s share is over 50 percent in the U.S., its global share is under 20 percent based on smartphone estimates of 775-800 million units worldwide, putting Apple behind Samsung and China OEMs (collectively).”

Donovan’s estimates for iPad sales also fall in behind the consensus predictions, at 82 million to 84 million potential units for the year…