Apple (AAPL) is certainly a long way from being doomed but that doesn’t mean the company is still firing on all cylinders like it’s done for most of the last decade. Case in point: Fortune has surveyed several Apple analysts and all of them expect the company’s next quarterly earnings report to show a decline in income compared to the same quarter last year. Granted, Apple’s second-quarter earnings last year delivered a hard-to-match $12.30 earnings per share, but the projected decline to the $10 range would still mark the first time since 2003 that the company has posted a year-over-year decline in earnings.

Fortune says the reason for this earnings sag is the steady fall in Apple’s gross margins, which peaked at over 47% in Q2 2012 and have been shrinking ever since while dipping below 40% last quarter for the first time since 2011. This explains how Apple can report lower earnings year-over-year while still producing record revenues that are projected to exceed $41 billion in Q2 2013. Concerns over Apple’s ability to maintain high profitability are only likely to intensify as rumors swirl around about the company offering a cheaper version of its iPhone that will surely boost its market share but will also likely slash its gross margins even further.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.