BTIG expects Walmart's exclusive prepaid brand Straight Talk, which is owned by America Movil, to launch a new SIM card that will work in any AT&T or T-Mobile GSM phone, excluding BlackBerry, creating a place for the iPhone in the prepaid market.
The new SIM card would offer unlimited prepaid, voice and data for just $45 per month.
BTIG analyst Walter Piecyk points out that Straight Talk already has directions on its website that explain how to unlock an iPhone.
Such a move would put to use a "healthy inventory" of used iPhones on eBay, according to Piecyk, but he adds the cheaper iPhone plans could also be a boon for consumers with new iPhones.
In anticipation of increased competition across the prepaid space, BTIG on Friday downgraded its rating on MetroPCS to "Neutral" from "Buy" and reiterated its "Sell" rating on Leap Wireless International.
"Up to this point customers have been limited by a selection of Android phones and BlackBerries that are inferior to what the postpaid service providers offer," Piecky wrote. "We are unaware of any way to use an iPhone on prepaid. The ability to use the iPhone with Straight Talk could materially change the competitive dynamic in the United States."
But it's not just the prepaid market that would be affected by this kind of plan. A major carrier like AT&T, which charges $90 per month for 450 minutes of voice, unlimited text and 3GB of data compared to Straight Talk's unlimited voice/text and data for half the price at $45/month, could be forced to reinvent themselves.
Piecyk writes that Straight Talk does not appear to cap or throttle its data.
"The disparity in pricing between Straight Talk's $45 per month and AT&T's is simply too great to ignore and Straight Talk is clearly indicating that the customer will be using the same network," notes Piecyk.
Perhaps the real question is whether customers here in the United States, already accustomed to subsidies, would be willing to pay full price for an iPhone. Piecyk points to eBay, where a used 16 GB iPhone 4 often sells for $225, as an affordable way for cash-strapped consumers to get in on the iPhone without paying the $600 for a new device.
BTIG expects Apple to sell 125 million iPhones in 2012, but if prepaid sales grow, the firm says it could impact Apple's future product roadmap. While fourth-quarter sales were still driven by the higher priced iPhone 4S, prepaid carriers selling legacy products at lower prices could drive additional growth.
"Their success could continue the practice of selling discounted legacy iPhones but might also generate thought on whether a new model should target this large latent market," Piecyk wrote. "We estimate there are 70 million prepaid customers in the United States and none of them are using an iPhone. The prepaid market is much larger internationally."