** Shares of Apple AAPL.O slip ~1% to $201.73 premarket as Needham downgrades stock to "hold" from "buy"

** Brokerage says innovations in generative AI opens the door for new hardware form factors, which could threaten iOS devices

** "We believe that, for this stock to work, it must have the catalyst of an iPhone replacement cycle, which we do not foresee in the next 12 months" - Needham

** OpenAI bought Jony Ive's startup io Products in a $6.5 bln deal and will bring the chief designer of early iPhones on board as creative head to make a GenAI device in a new form factor, taking users away from screens

** "If his newly invented form factor catches on with consumers, META and GOOGL will fast-follow in an effort to displace AAPL, we believe" - brokerage

** Analysts on average rate the stock "buy" with a median PT of $235

** Up to last close, stock had fallen ~19% YTD, compared with a 1.5% rise in the S&P 500 index .SPX and 3.1% increase in the Nasdaq 100 index .NDX

(Reporting by Akash Sriram in Bengaluru)

((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;))