FORTUNE -- There's a lot to digest in Peter Misek's note to clients Monday. Just back from a visit to some of Apple's (AAPL) Asian suppliers, Jefferies' managing director has a lot to say about the rate at which current products are being manufactured and what future products -- including the iPhone 6 -- are floating around in prototype form.
"Our checks indicate a low-cost model would be a retooled iPhone 4 with a scaled-down modem, apps processor, etc. Foxconn ... already has a supply chain for capacity scaling up to 200-300K units per day.
We see little financial impact to Apple from a low-cost iPhone launch mainly due to an expected high cannibalization rate. We think the most likely scenario would lead to Apple increasing its unit market share but that its revenues and EPS would remain largely unchanged. But [gross margin] would be impinged in order to reach the desired $200-$250 price point. We estimate that the low-cost iPhone's GM would be near corporate average but that it would be below the regular iPhone."
Bottom line: Misek thinks Apple's average selling prices may have peaked and that fiscal 2014 could see some further P/E compression. His new price target for 2014, $800 down from $900, reflects an earnings multiple of 11x ex cash.
|The Winklevoss twins are Bitcoin bulls|
|Bernanke's advice for college grads|
|Signs of new housing bubble in several areas|
|Bloomberg's lazy Apple bias|