FORTUNE — Following up on his Day 1 report out of this week’s Mobile World Congress in Barcelona (see “Apple is losing the screen-size war”), Jefferies’ Peter Misek posted a second note to clients Wednesday that offered four reasons that, as he puts it, “Apple is potentially facing a very rough two-year period”:
- Apple’s capital expenditures are likely to double in the next two years (adding $10 billion per year, he estimates) as the company is forced to finance its chip and touchscreen suppliers’ factory expansions and build up its iCloud and online service centers.
- Apple’s cash balance could be reduced by $10 billion, and $40 billion of the company’s cash collections could be deferred over the next two years if Apple plans to expand its iPhone sales into pre-pay countries like India by replacing its carrier subsidy model with an arrangement where it lends the money to buy the phones directly to consumers.
- “International iPhone sales are slowing dramatically,” Misek writes, “particularly in lower GDP per capita markets. We believe alternative distribution models like those in India can improve growth and the financing receivables will largely be securitizable; however, increased capital commitments would make a quick change more difficult should sales fall.”
- The rise in so-called whitebox smartphones sales will accentuate what he calls “Apple’s product gap.” He points to Glonee and Konka, both of which he says are offering handsets that are similar to the Samsung Galaxy S3 but for a fraction of the price. “We think these high-end white box phones are forcing Apple to invest in next-gen screen technology in order to differentiate.”
Misek rates Apple (AAPL) a “hold” and his $500 price target is one of the lowest on Wall Street.