The analyst points out that companies like AT&T, which has had Apple's iconic touchscreen device in its lineup from the first day that the phone was offered, were ok with reaching into their wallet to help new and existing customers pay for the iPhone because it helped increase the average monthly invoice (ARPU) that the customer would pay. But with AT&T's margins dropping from 44% in 2010 to the current 30%, it would seem that helping to pay for a $600 handset is eating into the carrier's profits. To turn things around, AT&T says it will start using a stricter upgrade policy.
The bottom line? The analyst expects Apple to sell 27.5 million units of the iPhone in Q3 which would bring in revenue $1 billion less than the Wall Street consensus. $1 billion is nothing to sneeze at, even on Wall Street. If all of this comes true, you might expect Apple's stock to take a hit after Q3 earnings are reported. Since Wall Street is said to look ahead 6-12 months, the analyst feels that the stock's gravy days are over. But as we alluded to in the beginning of this article, Piecyz's downgrade is not slowing down that runaway freight train called Apple as the stock is up .75% as of this afternoon, making a new all-time high at $639.83 earlier Monday.