Alphabet's New Google Pixel phone. Image source: Alphabet.

Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) new Pixel phone is here. In June, a report from The Telegraph noted the company was looking to "take more control over the design, manufacturing, and software" than in prior years. And it appears Alphabet did that by rebranding the phone with its high-end Pixel designation, killing the Nexus line of phones, and integrating its Google Assistant technology. For more insight into the phone's features and specifications, fellow Fool writer Evan Niu has you covered.

Still, Alphabet's foray into smartphones hasn't moved the needle as of now. The company quickly retreated from being an integrated hardware and software provider when it sold its Motorola Mobility division to Lenovo within two years of its purchase after a string of operating losses. Later attempts to leverage its name cache and its ecosystem advantage with the Nexus phone line have produced, by most accounts, strong products that have failed to translate into significant sales.

As such, Apple (NASDAQ:AAPL) should not be as concerned about Alphabet's new Pixel Phone as it should be about a poor outlook for device sales.

Gartner's forecast brings (mostly) bad news for Apple

Research and advisory firm Gartner recently released its updated worldwide device shipments estimate, and the results are bad news for all device manufacturers. Overall, the combined-shipment totals for tablets, ultra-mobile PCs, and PCs are forecast to drop approximately 3% this year before growing 1% per year through 2018. For a company as tethered to high-margin device sales as Apple is, this is a much bigger risk to the company than industry competition.

Device Type2015201620172018
Traditional PCs (Desk-Based and Notebook) 244 216 205 199
Ultramobiles (Premium) 44 49 61 75
PC Market 288 265 266 274
Ultramobiles (Basic and Utility) 196 177 173 173
Computing Devices Market 484 442 439 447
Mobile Phones 1,917 1,887 1,910 1,933
Total Devices Market 2,401 2,329 2,349 2,380

Data source: Gartner. Units are in millions.

If there is a single positive in the chart above, it's that the mobile-phone category appears to outperform the entire device market. Gartner expects device shipments to drop only 1.6% this year before growing 1.2% per annum through 2018. These figures are certainly nothing to write home about, but they are marginally better than a declining market.

Additionally, the ultramobile PC market, which includes Apple's MacBook Air, is slated for continued strong growth, but it won't be nearly enough to offset higher-margin iPhone weakness, should it continue.

Apple could be a beneficiary of overly bearish sentiment

Interestingly enough, Apple could be the beneficiary of Gartner's bearish outlook. Versus the greater S&P's price-to-earnings ratio of 25 times, Apple currently trades at a PE ratio of 13 times. In the event Apple is able to register earnings growth above expectations -- even slightly -- valuation repricing could add billions in market capitalization. On the other hand, if Apple only matches prior-year earnings, it's hard to imagine further valuation compression for a company that now trades at half the level of the S&P 500.

It's also important for Apple investors to note that market forecasts are not destiny. For years, Apple was able to grow at a faster clip than the overall mobile-phone market as the company continued to gobble up market share. However, if Garter's forecast is accurate, it should be noted that any significant growth will come from riding Apple's coattails, and not from industrywide tailwinds. If Apple is able to bring an exciting new technology to the next iteration of its iPhone, the stock could be tremendously undervalued.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.