Analyst: Apple Could Become the Next Microsoft

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Barclays has downgraded Apple (NASDAQ:AAPL) from Overweight to Equalweight on Thursday due to concerns about the maturing smartphone market. Barclays analyst Ben Reitzes, a longtime Apple bull, revealed the downgrade in a recently released note to investors.

“Frankly, we just couldn’t quite bring ourselves to use smart watches or TVs as reasons to raise numbers — nor were we fully convinced that these products could move the needle like new categories did in the old days,” wrote Reitzes. “As a result, we believe it is time to step aside, given a maturing smart phone market.” However, despite the downgrade, Reitzes maintained a $570 price target on Apple shares.

Although CEO Tim Cook has repeatedly promised that Apple would unveil new products and new product categories this year, Reitzes does not believe that new products would offset the risks associated with a maturing smartphone market. “We believe Apple’s story is all about iPhones and ‘new categories’ seem to be designed to make the iPhone more useful — but don’t necessarily re-accelerate growth in the iPhone category to sustainable double-digit levels,” stated Reitzes. The Barclays analyst appeared to be referencing a recent report from MobiHealthNews that stated that Apple’s iWatch would be a peripheral device that relies on the iPhone for full functionality.

The analyst also wasn’t impressed by the widely-reported rumors of a sapphire-covered iPhone. Reitzes pointed out that Apple’s iPhone margins would actually be negatively impacted by the addition of “advanced new features” like “sapphire glass, curved glass, and new batteries.”

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