Apple Inc.'s (APPL) new HomePod assistant, and the company's drive into services revenue, could weaken its ability to raise iPhone prices over the longer term, according to one of the few research firms without a buy rating on the world's biggest tech company.

Apple unveiled its newest piece of hardware -- the first since the Apple Watch in 2014 -- at its annual Worldwide Developers Conference Monday in San Jose, California as part of the stated ambition of CEO Tim Cook to grow services revenue to "the size of a Fortune 100 company" this year and then double it by 2020.

Pacific Crest Securities analyst Andy Hargreaves, who caused a minor stir Monday by lowering his price forecast for the $800 billion company and cautioning on slowing iPhone sales, thinks the focus on the HomePod's performance as a speaker, rather than its tie-in to Apple services such as iTunes, Apple Care and iCloud, is an "indication that Apple lacks the proprietary services to match up well with in-home smart assistants from (Amazon Inc. (AMZN) ) and (Alphabet Inc. (GOOGL) )

Hargreaves argues that in-home voice assistants, like HomePod, are most-valuable when they enhance your ability to shop, organize, travel and control you physical surroundings. 

"These factors make in-home assistants a terrible market for Apple to generate meaningful profits from, in our view. So, why is Apple even entering the market? We believe the answer is that it feels it has to in order to not be left out," Hargreaves said in a note published late Monday.

Apple at its 2017 WWDC.
Apple at its 2017 WWDC.

Apple generated around $7 billion in revenue from the 165 million customers it has across its various platforms such as iTunes, the App Store and Apple Pay in its second quarter, an 18% increase from the same period last year. Cook said in January that he hoped to double services revenue -- which totalled $24.4 billion in the year ending in September 2016, over the next four years.

However, services sales represent only 11.3% of full-year revenues, compared to the 63.4% contribution from iPhone sales, according to FactSet data. Last quarter alone, for example, Apple shifted more than 50.7 million iPhones.

"This highlights a broader issue for Apple as consumers' interaction with computing becomes even more fragmented; services in which Apple is weak are likely to drive the bulk of consumer value," he added. "At the extreme, this trend risks devaluing both mobile operating systems and hardware, which could create risk to Apple's smartphone pricing power over time."

Apple shares were indicated modestly higher in pre-market trading, with an expected opening price of $154.00, around 0.05% higher than Monday's close. 

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

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