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All eyes will be on iPhone sales as Apple reports earnings later on Wednesday.

The flagship mobile device accounts for more than half of Apple’s revenue, but analysts have expressed both near-term and longer-term concerns that iPhone demand could slow amid steep competition from Android devices and a shift by consumers to more moderately priced smartphones.

“Based on our April surveys, we believe iPhone sales have slowed following the launch of the Galaxy S5 combined with global consumers delaying iPhone purchases until a new larger screen iPhone launches later this year,” Canaccord Genuity analyst Michael Walkley said in a recent report.

Sanford C. Bernstein analyst Toni Sacconaghi said he sees three other issues for iPhone demand including uncertainty over sales through China Mobile, longer replacement cycles in the U.S. and Apple’s decision to sell lower-price iPhone 4 models in certain emerging markets, such as Brazil, India and Indonesia.

Collectively, Sacconaghi said those factors “point to more downside that upside risk to revenues.”

Indeed, most analysts expect iPhone and iPad sales to be roughly flat from a year ago — indicating concerns that Apple’s mobile business may have peaked unless it can find a way to reach more customers.

Of course, Wall Street is just as concerned about what comes next for Apple, and CEO Tim Cook has promised that the company will enter new product categories this year. However, it would be very un-Apple to offer more than the vaguest of hints on an earnings call.

More certain is that the iPhone will get an update this year, a move that Walkley said he believes will help Apple win back share at the high end of the market. An expected larger-screen iPhone should create “a stronger than normal upgrade cycle among Apple’s loyal and growing customer base,” Walkley said.

Apple’s longer-term concerns about iPhone have cropped up in documents made public as part of the current Apple-Samsung trial.

In one such presentation, Apple’s sales team worries that “Customers want what we don’t have,” noting that smartphone market growth was coming entirely from either large-screen phones or the sub-$300 phone market.

There is concern that the premium market as a whole, even with larger screens, will see slower growth in the coming years. Chip designer ARM has said it expects the high end of the market will see just 4 percent growth between 2013 and 2018, compared to double-digit percentage growth seen for the low-end and midrange markets.

“Anybody in the premium space has to be careful,” ARM Executive VP Antonio Viana told Re/code in a February interview.




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