Apple is Potentially Facing a Very Rough Two-Year Period [Analyst]

Apple is Potentially Facing a Very Rough Two-Year Period [Analyst]

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Jefferies analyst Peter Misek said that 'Apple is potentially facing a very rough two-year period' in a note to investors today.

FORTUNE posts highlights from the note:

Apple's capital expenditures are likely to double in the next two years (adding $10 billion per year, he estimates) as the company is forced to finance its chip and touchscreen suppliers' factory expansions and build up its iCloud and online service centers.
Apple's cash balance could be reduced by $10 billion, and $40 billion of the company's cash collections could be deferred over the next two years if Apple plans to expand its iPhone sales into pre-pay countries like India by replacing its carrier subsidy model with an arrangement where it lends the money to buy the phones directly to consumers.
International iPhone sales are slowing dramatically especially in lower GDP per capita markets, says Misek. "We believe alternative distribution models like those in India can improve growth and the financing receivables will largely be securitizable; however, increased capital commitments would make a quick change more difficult should sales fall."
The rise in so-called whitebox smartphones sales will accentuate what he calls "Apple's product gap." He points to Glonee and Konka, both of which he says are offering handsets that are similar to the Samsung Galaxy S3 but for a fraction of the price. "We think these high-end white box phones are forcing Apple to invest in next-gen screen technology in order to differentiate."

Notably, Apple is widely rumored to be working on a lower-cost iPhone to address emerging markets with analysts Katy Huberty and Brian White expressing confidence in the possibility.

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Apple is Potentially Facing a Very Rough Two-Year Period [Analyst]
zeppy - February 28, 2013 at 2:26pm
Payback. F u Apple. The company deserves all the bad things possible that can happen to them as just punishment for all of their evil practices. Praise be to justice and let Apple become less rotten and mend their evil greedy filthy ways.
VinnyG - February 28, 2013 at 3:00pm
Intelligent comment..... Not !
zeppy - February 28, 2013 at 3:07pm
True Comment... Yes ! Deny all you want the fact that Apple is heading for a well-deserved dark future.
AML - February 28, 2013 at 4:50pm
I think you're talking about Sony.
zeppy - March 1, 2013 at 7:48am
Sony has done as poorly as Apple in terms of limiting users, locking down their products unnecessarily. Sony's value as a company has plummeted over time as a result of this combined with Samsung and LG being more nimble, adaptive while driving value lower cost products into the hand and homes of consumers. Apple used to be loved and admired by so many including me. Now only hatred based on Apple's ugly truth remains.
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