It's now been nearly four years since Apple (AAPL 0.50%) reported its first-ever decline in iPhone unit sales, which was an important inflection point for the company. Apple was able to keep squeezing growth out of the iPhone segment with price increases, but even that strategy seems to be hitting a ceiling, as most consumers balk at $1,000 phones and are keeping their handsets longer as a result.

This week, D.A. Davidson reiterated its buy rating on Apple shares while analyst Tom Forte boosted his price target on the stock to a whopping $375 -- now the highest on Wall Street. Somewhat counterintuitively, Forte argues that the iPhone segment peaking was a blessing in disguise.

Apple Store Fifth Avenue

Image source: Apple.

Forcing Apple to expand into services

"In our view, the maturation of the smartphone market was, in hindsight, one of the best things to happen to Apple, because it forced the company to pursue noncore opportunities to drive future growth," Forte wrote in a research note to investors. In other words, Forte is impressed with how Apple has grown its services business in recent years, pursuing opportunities in financial services with Apple Card, video streaming with Apple TV+, and more.

Speaking of Apple Card, the analyst is also bullish on the new monthly installment plan that the company introduced last month, which allows Apple Card users to buy iPhones with 0% interest. That could end up being "a catalyst for iPhone unit sales for several years," according to Forte.

This year is also when Apple is widely expected to jump into 5G, which might create a multiyear growth cycle as consumers upgrade to the new technology. "There is enough complexity and hype when it comes to 5G (the next-generation wireless network) that we believe Apple can exploit this multi-year opportunity and generate positive smartphone unit growth for, at least, its next two product launches -- fall of 2020 and fall of 2021," the analyst says.

Forte also expects that wireless carriers will start to ramp up promotional spending for 5G devices as they pursue greater returns on the billions that they have collectively been investing in network infrastructure. U.S. carriers have been less generous on the promotional front in recent years, but will want to nudge consumers into upgrading to 5G. Any discounts could help offset some of the aforementioned high prices of iPhones, although consumers have signaled that 5G support may justify a premium.

Lastly, Forte points to the Cupertino tech giant's share repurchase program, which still has around $79 billion in authorization remaining, as a contributor to recent gains. The company typically provides updates on its capital return program in April or May when it reports fiscal second-quarter results.