Is a new iPhone enough to snap Apple's sale slump?

Apple has been having a rough year.

Sales of the iPhone fell 16 per cent for the first time ever leading to revenue for the tech giant falling for the first time since 2003.

Then the European Union came knocking and ordered Apple to pay $19 billion in back taxes.

"Apple is a company that lived hit to hit: the iPod, iPhone, iPad," said independent Silicon Valley analyst Rob Enderle of Enderle Group.

"Without those successive hits, it is struggling. While it has plenty of cash, it has stopped being a market maker."

Apple needs a win.

Tomorrow morning (3:00am AEST) Apple will host its annual September iPhone event, where it's expected to unveil a new phone model and a second-generation Apple Watch.

So what can Apple do tomorrow to reinvigorate iPhone sales and impress investors and consumers alike?

According to one Australia-based industry-watcher, nothing.

Smartphone saturation

Associate Professor David Glance is the director of the UWA Centre for Software Practice and writes regularly about technology for The Conversation.

According to Dr Glance, Apple and its biggest rival Samsung have reached "peak premium smartphone".

"I think that the challenges are the fact that we've reached a saturation point and there's really (only) going to be a little bit of a churn between Android and iPhone," he said.

"The decline of this was inevitable. Samsung will have the same issues."

The rumour mill has been grinding away with talk of iPhone 7 models that will boast faster chips, more sophisticated cameras, and improved software while doing away with jacks for plugging in wired headphones.

But Dr Glance said it probably doesn't matter what Apple reveals tomorrow.

"There aren't enough markets nor enough reasons for people to change, irrespective even if they radically changed it," he said.

"They're not going to come out with a feature that's going to be sufficiently different to persuade (consumers) who wouldn't normally change, to suddenly change."

According to Dr Glance, most people are no longer upgrading their phones on a yearly basis.

That's a problem for Apple.

PHOTO: Apple CEO Tim Cook introduces the iPhone 6s and iPhone 6sPlus during last year's iPhone event.(Reuters: Beck Diefenbach)

If not smartphones, what?

Hardware is so 2014.

Now, it's all about the software and technology.

Specifically, Apple Pay, the service that allows users to make payments by tapping their phone or Apple Watch instead of a bank card.

Some Android phones also possess a similar technology, called Google Wallet.

"These technologies are much more significant drivers of phone adoption," Dr Glance said.

"I get more questions when I go and tap my watch on a terminal to pay for something, including which bank I'm using and how to switch."

"Apple really needs to concentrate its efforts on doing things with the phone rather than worrying about what the phone itself can do."

Is Apple in serious trouble?

Apple is having a bad year, but it's worth putting that into perspective.

According to its most recent earnings report, Apple had $231.5 billion in cash plus marketable securitiesat the end of June.

Nobody is hitting the panic button in Cupertino just yet.

And despite the bad news, Dr Glance said Apple could be in for a boost in sales, but not because the launch of a new iPhone model.

"The most significant advance that's going to boost Apple's phones is going to be Samsung's recall," he said.

"If we see a boost, it's going to be hard to distinguish the impact of Samsung's problems with the actual phone itself.

According to Digitimes, Apple has revised upward orders by 10 per cent for parts for the new iPhone modelto take advantage of Samsung's troubles.

Stay tuned, we'll have coverage and reaction to Apple's big event in San Francisco event tomorrow morning.