The One Apple Analyst Who Says ‘Sell’ as the Stock Keeps Climbing

I feel as though I write about Apple $AAPL at least on a weekly basis.  At times it's hard not to talk about Apple from it's supplier human rights issues in China to the anticipated and assumed launch of the next iPad next week, and not to mention the straight line propulsion of it's stock price.  But when you find a story that there is one lone analyst who has a sell rating on the stock I believe that you have to take a listen.  As I have encouraged people to do from time to time which is to take a contrarian view this piece in Bloomberg does just that with Apple.


Via the Bloomberg piece

• Edward Zabitsky,   an analyst at Toronto-based ACI Research, doubts Apple will be able to maintain the margins of its top product, the iPhone. He’s betting that a new web standard called HTML5 will overcome some of the deficiencies of web apps that led to the rise of so-called native apps, the type sold in Apple’s App Store.
• As a result, he expects iPhone prices to tumble to better compete with Android and Windows phones. Over time, he predicts the gross margin on the iPhone will fall from more than 50 percent to about 25 percent — roughly the same as the iPad and Mac. Or maybe worse. Since Samsung Electronics makes many of the parts used in its own phones — displays, chips, modems — it will be able to undercut everyone, including Apple.
• Zabitsky also says cell carriers are getting tired of watching profits from iPhone sales accrue to Apple.  “I think carriers’ attitudes are already changing,” he says, citing a recent promotion in which Verizon offered more data per month to owners of Android phones.  See recent post [March 1, 2012 iPhone is nightmare for carriers] for more details on the iPhone impact to carriers.
• It hasn’t been easy sticking by his sell recommendation, which is more than a year old. Zabitsky says he didn’t foresee how poorly Nokia and Research In Motion would do during that time, and admits he should have waited longer to play his hunch about the rise of HTML5.  “I should have waited for there to be more adoption, but intellectually, I feel good about the call,” he says.