Apple (NASDAQ:AAPL) stock is down more than 4% since last Wednesday, thanks in part to new research stating the tech titan will likely post its first-ever yearly decline in iPad sales.

Specifically, according to a new report from ABI Research, total iPad shipments in calendar year 2014 were on track to fall 8.1% year over year to 68 million. "Unless Apple can pull off a 32+ million unit quarter," stated ABI Research Senior Practice Director Jeff Orr, "sales for CY2014 will be down for the first year since the iPad launched."

On the surface, that seems like terrible news. But does it mean the subsequent drop in Apple's share price was merited?

In a word: nope.

And we're surprised ... why?
I'm not saying ABI's report isn't valid. In fact, when the final figures are reported for calendar year 2014, Apple seems all but certain to see a year-over-year decline in iPad sales. After all, Apple sold just over 12.3 million iPads in its CY third quarter, which marked a 13% drop from the same year-ago period. The quarter before that, iPad unit sales dropped 9% year over year to just under 13.3 million. Three months earlier, Apple had sold 16.35 million iPads, for a decrease of 16%. 

Though the upcoming quarterly figures will include the all-important holiday shopping season, ABI is also correct in pointing out Apple's holiday quarters have historically accounted for roughly 35% of its yearly iPad total. Even adjusting for a small sales bump after Apple introduced a freshly expanded iPad lineup in October, ABI's expected CY 2014 total would still mean the company moved "only" 26 million iPads this holiday season, or roughly equal with the same period in 2013. 

In short, given the iPad's underperformance for the first three calendar quarters of calendar 2014 already, nobody should be surprised by ABI Research's prediction for yearly sales to decline. On top of that, ABI predicted 16% growth in the tablet market as a whole in 2015, followed by continued growth for the next five years. To borrow ABI's words, this should allow Apple "to reverse [its] iPad misfortunes in 2015."

iPhone to the rescue
Apple isn't exactly struggling in the meantime. To the contrary, the tech giant not only crushed expectations on both revenue and earnings for its previous quarter, but made it clear it expected to post another banner quarter when it reports later this month. If another recent report on mobile device activations is any indication, consumers' overwhelming appetite for the new iPhone 6 and iPhone 6 Plus is set to drive yet another incredible performance.

This is also great for Apple as iPhones not only enjoy higher average selling prices than iPads, but also tend to have a more predictable upgrade cycle thanks to higher usage rates. Apple CEO Tim Cook spoke to the latter topic for iPads during the last conference call, stating, "Because we've only been in this business for four years, we don't really know what the upgrade cycle will be for people."

But that upgrade cycle could be huge when it does take effect. Cook also noted Apple had already sold 237 million iPads in just over four years, which was about twice the number of iPhones sold over the same length of time following the smaller device's introduction. Moreover, Cook insisted the there's still plenty of room for growth for the iPad segment, stating:

I know that there is a popular view that the market is saturated, but we don't see that. ... The last market research data we have is in the June quarter. ... If you look at our top six revenue countries, in the country that's sold the lowest percentage of iPads to people who had never bought an iPad before -- that number is 50%. And the range goes from 50% to over 70%. [...] That's not a saturated market."

And yes, some of those upgrades and new purchases are likely being cannibalized by sales of Apple's larger iPhone 6 Plus "phablet." But as long as shoppers are still buying an Apple product, the folks in Cupertino rightly remain pleased. As Steve Jobs once put it, "If we don't cannibalize ourselves, someone else will."

All things considered, Apple investors need not be concerned over the company's seemingly weak iPad sales. Those sales should return to growth eventually, and in the meantime Apple is happily riding a wave of enthusiasm surrounding its other wildly profitable products. In the end, the best thing for Apple shareholders to do is to keep calm and carry on.