iPhone 6 rumors have already begun to hijack certain parts of the internet. For weeks after the release of the iPhone 5s headlines were dominated by the “confirmation” of news that Apple Inc. (NASDAQ:AAPL) was set to release a bigger screened iPhone 6. Those rumors grew stale, and have given way to news of an iPhone 6 with a curved screen.

For investors these rumors are more irrelevant with each passing day. They are coming to terms with the fact that the iPhone 6 cannot save Apple Inc. (NASDAQ:AAPL). It doesn’t matter if the device has a curved five inch display, the smart phone is losing its earnings power. Investors knew this day would come, and the reality has been suppressing Apple’s stock price for the last twelve months.

Apple iPhone irrelevance

There are a few reasons behind the decline in the importance of the iPhone, and those reasons render the iPhone 6 close to impotent. The major factor is the margin problem. The Apple Inc. (NASDAQ:AAPL) gross margin may have recovered in the September quarter, but the company is expecting that to remain constant in the fourth quarter.

Gross margin is one of the most impressive figures at Apple Inc. (NASDAQ:AAPL), but investors have to realize that the metric is in secular decline. The fall is not an aberration caused by the iPad Mini or any other one-off, it is the result of a maturing market and maneuvering by Apple Inc. (NASDAQ:AAPL) rivals. Google sells the Nexus 5 at around cost for a reason.

Competition is bound to drive down gross margins at Apple Inc. (NASDAQ:AAPL). The company will be forced to spend more on marketing, more on research and more on capital in order to keep up. The iPhone 6 is likely to bring lower gross margins to Cupertino, adding to pessimism around the number.

There are not that potential iPhone customers out there. The market is becoming saturated quickly. Apple Inc. (NASDAQ:AAPL) has a great retention rate, but it won’t be enough to sell 100 million iPhones every year for the next decade. Sales will relax as the smart phone is displaced by the next big thing.

Apple Inc. (NASDAQ:AAPL) is not dead in the water by any means, and the stock is not a Sell as a rule. The iPhone 6 will not save the company, however, and investors need to get comfortable with the fact and ignore the flurry of rumors when making decisions about the company.

Apple upside

Apple Inc. (NASDAQ:AAPL) needs to diversify away from the iPhone in order to keep its gross margin. The chances of the company finding the “next big thing” are not miniscule, but it’s difficult for investors to bet on the Cupertino company reinventing the iPhone.

A wider range of successful but not world beating products like the iPad might be the way for the company to go. Apple Inc. (NASDAQ:AAPL) needs to do something, it cannot be saved by the iPhone 6.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.