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Ever since Apple ( AAPL ) stock peaked last summer, few on Wall Street have talked about the iPhone maker potentially reaching a market capitalization of $1 trillion, as they once did. But on Wednesday, Bernstein analyst Toni Sacconaghi resurrected the possibility. In a research report, Sacconaghi said the company’s “recipe for a $1 trillion market cap” could be a shift from being a hardware company to a service provider. Today, Apple is valued as a computer hardware company, making it vulnerable to replacement cycles and falling average selling prices and margins, Sacconaghi said. Apple would be valued more highly if it offered its devices on a service plan, he said. Apple stock was up nearly 1%, above 94, in afternoon trading on the stock market today , giving it a market cap of $516 billion. Sacconaghi rates Apple stock as outperform, with a price target of 135. “Consumers have become accustomed to paying monthly bills for various services, such as internet, cable, Netflix ( NFLX ), and Spotify, to name a few,” Sacconaghi said. “Even among the quantitatively-minded investment community, many find it easier to justify a $30 monthly charge (for an iPhone) than a $720 purchase every 2 years … even though they’re essentially the same.” Apple’s Slowing Upgrades Argues For Recurring Model By offering Apple products as a service, the company could switch to a recurring business model, which would likely get customers to spend more over time. In return, Apple customers could avoid hefty upfront payments for hardware and get the latest devices sooner, he said. Apple’s main business problem today is getting users to upgrade to newer devices when their current iPhones, iPads and Macs are working just fine. Apple isn’t like other makers of PCs and smartphones because it has a much stronger brand attachment. People love their iPhones, he said. “The challenge and opportunity for Apple is whether it can migrate from a transactional monetization model to a subscription model,” Sacconaghi said. Companies that have successfully shifted their business models to subscriptions include Adobe Systems ( ADBE ), Microsoft ( MSFT ) and Amazon.com ( AMZN ), he said. “We see the monthly cost of a family plan of Apple products amounting to similar or less than what U.S. consumers spend for cable television and wireless service,” Sacconaghi said. “We estimate that an Apple package needed for our family (3 iPad Minis, 1 iPad Air – each with a three-year replacement cycle; and 3 iPhones, each with a 2-year replacement cycle) would cost ‘only’ about $140 per month — well below the price of our current monthly cable bill and wireless bill. “Even if we included additional Apple services (Apple Music for $15 per month; iCloud storage for $10 per month; and a speculated but yet to be released over-the-top television offering for $40 per month), our hypothetical Apple monthly would be an estimated $207 per month.” If Apple were to pursue such a strategy, it would face resistance from its wireless carrier partners and would have to educate consumers of its benefits, Sacconaghi said. Apple already offers a smartphone subscription plan called the iPhone Upgrade Program. That program charges a monthly fee for iPhone hardware and handset upgrades every year. RELATED: Apple To Double iPhone Memory With Next Handset: Report Apple Has Reportedly Started Production On iPhone 7 Apple Should Be Valued Like Internet, Not Hardware, Company