Apple slips as Needham downgrades stock citing competition risks

Shares of Apple AAPL.O slip ~1% to $201.73 premarket as Needham downgrades stock to "hold" from "buy"

Brokerage says innovations in generative AI opens the door for new hardware form factors, which could threaten iOS devices

"We believe that, for this stock to work, it must have the catalyst of an iPhone replacement cycle, which we do not foresee in the next 12 months" - Needham

OpenAI bought Jony Ive's startup io Products in a $6.5 bln deal and will bring the chief designer of early iPhones on board as creative head to make a GenAI device in a new form factor, taking users away from screens

"If his newly invented form factor catches on with consumers, META and GOOGL will fast-follow in an effort to displace AAPL, we believe" - brokerage

Analysts on average rate the stock "buy" with a median PT of $235

Up to last close, stock had fallen ~19% YTD, compared with a 1.5% rise in the S&P 500 index .SPX and 3.1% increase in the Nasdaq 100 index .NDX