At this point, it is widely believed that Apple (NASDAQ:AAPL) will see its very first year-over-year iPhone shipment declines during fiscal 2016, after many years of straight unit increases. To make matters worse, though, a recent research report from UBS analyst Steve Milunovich suggests that not only are the iPhone 6s and 6s Plus not selling as well as had been hoped, but Apple's mix of products is turning out to be poorer than expected.

Indeed, more customers are apparently opting for older generation iPhones than in previous cycles, per Milunovich.

I believe that this fairly adverse downward mix shift could have been at the very least mitigated, if not downright avoided, if Apple had done just one simple thing with its most recent iPhones.

New displays could have made the new phones compelling enough
Unlike many of its peers in the premium smartphone space, Apple tends to recycle the new displays that it introduces in "new number" iPhones in the "s-cycle" phones that it releases in the following year.

When the iPhone 6 and 6 Plus first came out, they had quite excellent displays: DisplayMate's Dr. Raymond Soneira claimed that these were -- at the time -- the "best" smartphone LCDs he'd ever tested.

A year later, the displays found on the iPhone 6s and 6s Plus are still good, but they are hardly the best in the business. The iPhone 6s' 1334-by-750 pixel display pales in comparison to even what many mid-range Android phones feature these days.

The iPhone 6s Plus comes with a sharper 1920-by-1080 pixel display, but it lags even the smaller iPhone display in terms of color reproduction and contrast ratio.

At any rate, the problem here is that when a customer goes to, say, an Apple store or another retail store that sells iPhones and sees the two phones side-by-side, there is no immediate "wow" factor that stands out.

The displays are largely identical, so what the average Joe shopping for an iPhone sees are two smartphones that look pretty much the same. Of course, we know that the newer iPhones have better specs under the hood, a faster Touch ID, and even 3D Touch, but the benefits of those features aren't immediately obvious to the person who just walked into the Apple Store. They're features that users come to appreciate after buying the device.

However, since there is very little visible difference between the two phones (and the newer iPhone is actually thicker), the run-of-the-mill smartphone buyer may well think that going with an older, cheaper model that seems "pretty much the same" is the right move.

I believe that if Apple had upgraded the displays on the iPhone 6s and 6s Plus, this apparent product mix "problem" could very well have been mitigated.

Why the obsession with displays?
Ideally, Apple would introduce both a new/more attractive industrial design and a new display with each new generation. However, I can understand that the former may not be all that feasible, so we'll give Apple a "pass" on that.

However, with respect to display technology, the competition iterates at a yearly clip, so there is really no excuse for Apple to use the same panels for two years.

At any rate, my hypothesis is that if the iPhone 6s and 6s Plus had displays that were superior to the prior generation, then users would probably notice an immediate difference between older  and newer generation iPhones.

The iPhone 6s display is noticeably less sharp than both the iPhone 6s Plus and the various mid-range to high-end Androids available on the market. Even if the 6s display had merely been sharper -- with no other image-quality enhancements -- it could have been a nice selling point.

With the 6s Plus, I'd argue that the display is quite sharp, so the main area where I would like to have seen improvements would have been in color accuracy, bringing it at least on par with the iPhone 6s in this regard. Apple could then have saved the resolution increase for the iPhone 7 Plus.

Let's hope Apple remedies this mistake with iPhone 7s/7s Plus
At this point, it's obviously too late for Apple to salvage the iPhone 6s/6s Plus cycle. Investors should brace themselves for year-over-year unit sales declines, and for the distinct possibility of  average selling price declines during the iPhone current cycle.

I expect that from a product perspective, iPhone 7 will be a very large leap froward from the iPhone 6s, both internally and externally, so Apple will have that tailwind working for it during fiscal 2017.

The key for Apple, though, will be to make sure that when it launches the iPhone 7s and 7s Plus  in late 2017, customers have every reason in the world to buy those phones -- instead of the iPhone 7 and 7 Plus -- if they can afford to do so. That, in my view, will mean including an updated display.