Apple is trapped inside a shrinking universe

Apple is shrinking. Not a little - a lot:

• Revenue was down 14.5% in Q3 2016, to $42.4 billion.
• iPhone sales were down 15% to 40.4 million.
• Analysts are expecting full-year declines in iPhone sales.

And the upcoming iPhone 7 release does not seem to be promising much in new features. It even looks identical to iPhone 6s, so why buy it? critics are asking.

This is a difficult problem for Apple to solve, because Apple is uniquely both a software and a hardware company. The two are tied to each other. In order to make more sales from software - the App Store, iTunes, Apple Music and so on - it needs to sell more hardware.

If one shrinks, the other does too.

Google makes hardly any hardware devices. Its software is designed to run on anyone's system, even Apple's. Google doesn't care whether a device is the best-selling iPhone or the worst Chinese Android ripoff: Gmail, YouTube, Maps, and search work equally well on them all of them.

Scroll down for charts that show the incredible shrinking world of Apple, and then we'll discuss Apple's potential escape routes, which CEO Tim Cook hinted at last night.