The iPhone is integral to Apple's (NASDAQ:AAPL) performance. It's no surprise, therefore, that reports of worse-than-expected demand for the company's newest iPhones have weighed on the stock recently. Shares fell 25% between Oct. 1 and market close on Dec. 12 as investors have growing concerns about the segment's prospects. If iPhone sales trends turn downward, they wonder, can the company keep growing?

Fortunately, Apple has one healthy catalyst to help soften the blow of any weakness in iPhone sales -- at least that's what investors hope. Apple's second-largest segment, services, has been firing on all cylinders. But what if Apple's services business is about to see a meaningful deceleration in its growth rate? One analyst is betting this will happen in fiscal 2019.

iOS app icons

Image source: Apple.

Will services growth slow in fiscal 2019?

In a note on Wednesday (via Barron's), Macquarie Research analyst Benjamin Schachter lowered his 12-month price target for Apple stock from $222 to $188. "Unfortunately, right as investors are becoming more interested in Services as a meaningful part of the story, we think it is now about to slow," Schachter said.

Specifically, he estimates that services' year-over-year revenue growth rate in fiscal 2019 will be 22%, down from 26% growth in fiscal 2018 when excluding one-time items in both fiscal 2017 and 2018. 

The segment, which includes revenue from the App Store, iTunes, AppleCare, Apple Pay, licensing, and other services, will see weaker tailwinds going forward, according to Schachter.

In particular, the analyst believes Apple's strength from the App Store in its Asia Pacific region, which he estimates accounts for almost 60% of total App Store spending, could lose some of its luster. This will be "led by first and foremost the freeze of new game registration in China that will start to become a more prominent drag on new game spending into next year," he said.

In addition, Schachter predicts that the company's momentum in Apple Care and licensing will also slow. And he notes that strong growth in Apple Music, iCloud, and Apple Pay are still too small to offset slower growth from the rest of the segment.

Still a key catalyst

Of course, 22% growth from services would still be strong -- especially considering that services now accounts for a meaningful 14% of revenue (up from 11% just two years ago). To this end, even Schachter is likely optimistic about services potential -- albeit less optimistic than he was. The analyst maintains an outperform rating on the stock, and his 12-month price target represents 11% upside from where shares closed the trading day on Wednesday.

Furthermore, it's worth emphasizing that Apple's services business wrapped up fiscal 2018 on a high note. The segment's revenue hit a record high in the company's fiscal fourth quarter, rising 27% year over year when excluding a one-time $640 million favorable impact in the year-ago quarter. In addition, management continues to have high expectations, guiding for annualized revenue in the segment to rise to about $50 billion in fiscal 2020 (up from $37 billion in fiscal 2018).