With a smaller iPad and increasing smartphone competition that includes Research In Motion's BlackBerry 10, which is due by the end of the month, investors appear convinced Apple (NASDAQ:AAPL) will have to give up some of its legendary pricing premium in order to keep peers at bay.
Eroding carrier subsidies may also be hurting profits. At least week's Consumer Electronics Show, T-Mobile announced a potentially crazy $70 no-contract plan that includes unlimited data. We don't yet know if AT&T and Verizon will follow suit, but it seems unlikely given how much the pair make from data fees. A public outcry for lower pricing could change that.
Either way, this series of unfortunate events could push CEO Tim Cook to rethink pricing and subsidy arrangements, and in turn, exert pressure on gross margin. How likely is it to happen? I address this question and more in the video below. Please watch it, then weigh in using the comments box below.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
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