Dude they are losing market share every second to Android. For Q1 Apple was up 6%, Android up 79%. That's the problem. Its MSFT vs AAPL all over again and we all know how that turned out.
If Apple sold 100 brand names of phones that ran iOS and sold them for pennies on the dollar as Google sells Android inside of the tons of brands that operate on the Android platform, then Apple would be killing everyone in market share. It's simple... I can open a dollar store and sell a tennis ball that has air inside for $1 buck (i.e, Android Phone) and you can sell the same tennis ball at Walmart for $2 bucks but instead of air inside, it has a gas that bounces a bit higher. You sell the ball for $2 dollars because it costs more to produce the ball with the gas (i.e. iPhone). Yet I who sell the cheaper air ball for a buck, am able to sell 10 billion of them and put 50 different brand names on the cover of the ball. I would technically have higher market share but it doesn't mean that my ball is better than yours. It just means that people are looking to pay less for the phone and the majority of the world is lower to middle class people who can only afford cheap Androids which carriers are either giving for free, for a penny, or buy one get another free. I guarantee that if Apple where to lower the quality of the iPhone and sell them for less money and give them away for free or pennies, they would kill Android and everyone else.