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Citi paints not-so-pretty picture for Apple's iPad, future market

Citi says Apple headed for rough weather in 2014 as tablet market growth collapses.

iPad Air.  Tablet growth is heading south in a hurry, says Citi.
iPad Air. Tablet growth is heading south in a hurry, says Citi.

Citi Research has released a report that doesn't bode well for the iPad if its conclusions prove to be accurate.

In data-dense presentation titled, "Mobility Hardware and Components, Marketing Presentation, March 2014" released Wednesday, a team of analysts reiterated a familiar Citi theme, saying the era of "device exhaustion" has arrived, adding in the same set of bullet points that "we are NOT positive on Apple" (emphasis Citi's).

Though this wouldn't be the first time Citi has been sour on Apple, Citi's forecast for the tablet market makes Apple the most vulnerable due to its leadership status.

Citi sees tablet year-to-year growth in the 20 percent -- or slightly above -- range this year, then dipping below 20 percent by the first quarter of 2015.

That compares to the heady 140 percent-plus growth seen in early 2013.

While market-growth deceleration happens with any device eventually, Citi sees the tablet cycle running its growth course sooner than had been previously expected.

The Citi report reflects a January IDC report on tablets that said "markets such as the US are reaching high levels of consumer saturation."

Overall, Citi's device exhaustion theme doesn't only apply to tablets.

"Device Exhaustion is driving shorter product life cycles. Developed markets are approaching smartphone saturation. Average Selling Prices (ASPs) are poised to fall. Innovation in smartphones is becoming elusive. Margins in the supply chain are at risk," Citi said in a summary.

And what's the next big thing? "So look for unique focus areas of investing such as Internet of Things (IoT)," the report said.