Apple and the Revenge of the Phone Carriers

Is Apple merely mortal? Apple is the largest, most dominant and highly valued company on the planet. It’s measured against entire gross national products. Doubt it at your peril. And yet Apple does not control its own destiny. After all, the company counts on wireless carriers to connect and help market its iPhones. What if the likes of AT&T, Verizon Wireless, and Sprint (combined worth: roughly half of Apple) don’t necessarily like the idea of just getting by financially while the Cha-chinger of Cupertino hordes spectacular profits?

What if they wise up and realize they can earn a bigger cut of the recurring windfall every time Apple upgrades its hardware? Or just slow the iPhone’s aggressive upgrade cycle to protect their own profits? It’s a grain of kosher salt being offered by analyst Walter Piecyk of brokerage BTIG, who is sounding a rare cautionary call on Apple (which Wall Street rates with 49 Buys, 7 Holds—including Piecyk—and just 1 Sell). He downgraded the stock to Neutral from Buy on the fear that the carriers will get their act together this year to defend their profitability.