Gillis said his company forecasts more than 25 million iPads selling this year, which he called a "great number" but cautioned that it could let down investors if Apple doesn't exceed that threshold.
Apple tablets face the same issues as its iPhones—other technology companies have caught up, Gillis said. Now, tablets from Amazon, Google and Microsoft cut into Apple's market share.
"It's following the same path as the iPhone," Gillis said. "The only smartphone was the iPhone and the competition slowly caught it. It's the same thing in the tablet marketplace. The only tablet was an iPad and then Amazon is going to get a little traction."
Apple made headlines this weekend when it acquired PrimeSense, an Israeli chip-developer whose 3-D machine vision technology was used in Microsoft's Kinect devices. Israel media said the deal cost about $350 million, which Gillis called a "drop in the bucket."
(Read more: Apple acquires 3-D chip developer PrimeSense)
Gillis said Apple was "behind the curve" when it came to motion sensing, which he predicted was becoming a bigger part of the home living room. He said Apple should be more "inquisitive" going forward and put more cash into work toward innovation rather than dividends, for example.
"They're lacking in payments," Gillis said. "They're lacking in advertising. There are a lot of areas where they're weak [that] they could grow in. They can go up and down the stack a little more."
Last month, Apple posted better-than-expected earnings during its fourth-quarter, but disappointed investors on its forecast of future earnings. During the earnings call, Apple CEO Tim Cook predicted an "iPad Christmas."
Despite his bearish stance on Apple's outlook, Gillis said his in-house research showed Apple products still remained high on many people's Christmas lists.
"That being said, I'm going to buy one," Gillis said. "My kid only wants an iPad this Christmas."