Wall Street stunned investors today with a rare and wholly unexpected downgrade for Apple.
“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,” BTIG’s Walter Piecyk, a leading technology analyst, told clients Monday. “This will increase the need for Apple to grow its business in the pre-paid dominated emerging market space, in which handset subsidies are a rarity and the $600 ASP (average selling price) of the iPhone represents a big chunk of a household’s monthly income.”
Speaking with CNBC this afternoon, Piecyk tells CNBC today that the decline in Apple sales that comes as a result of this carrier trend “could lead to a revenue miss of up to $1 billion below the current consensus analyst estimate for the fiscal third (next) quarter.”
Wireless operators were happy at first to offer these generous subsidies for the iPhone on expectations that their usage would raise customer’s wireless bills, making up the difference and then some. But it hasn’t exactly played out that way, especially for a carrier like AT&T, Apple’s largest customer.
“We believe that investors should take a breather during the expected strength of this quarter and the rapid rise in the stock,” Piecyk believes.
