While most seem to have been wondering how long it will take Apple Inc. stock to hit $1,000, analyst Walter Piecyk of BTIG appears to be more concerned with how long wireless carriers will continue to help keep iPhone prices at $199.
Piecyk cut Apple (NASDAQ: AAPL) to hold from buy Monday even though he expects the company to beat analyst expectations when it reports earnings later this month.
The problem, he believes, is that wireless carriers such at AT&T Inc., Verizon and Sprint are unlikely to support frequent iPhone upgrades on $600 iPhones that consumers are paying just $199 for when they sign up for a service plan.
"We expect post-paid wireless operators to remain firm in their plan to stunt the pace of phone upgrades in 2012 and we expect to see some initial evidence of their success in the current quarter," he wrote.
That will put pressure on Apple to lower its price on its popular iPhone, he believes, cutting its profit margin on the device.
Piecyk predicts a decline of 4 million between the first and second quarters to just 9 million, with the biggest drop from Apple's biggest customer AT&T (NYSE:T).
Carriers will be working hard to promote smartphones that use the Android operating system from Google Inc. (NASDAQ: GOOG), he writes, but there is hope for devices from Microsoft Corp. (NASDAQ: MSFT) and Nokia: "As Android's initial popularity continues to fade because of it's uneven and fragmented performance and BlackBerry falls further into oblivion, there is renewed hope that Microsoft and Nokia will be able to produce a viable alternative to Apple."
Apple stock started Monday down slightly at around $627 after hitting an all-time high of $634.66 Thursday. Apple operates a retail location at ABQ Uptown.