UBS analyst Steven Milunovich lowered his iPhone sales expectations for 2013 by 5 million for each of the quarters ending in March, June and September, according to CNET. He also lowered expectations for the iPad, dropping the estimates for each quarter by 2 million units.
In addition to lower sales, Milunovich, in a note sent out to investors, also lowered Apple's stock target price from $780 to $700. He also brought down his earnings estimates for both fiscal 2013 and fiscal 2014.
Milunovich explained he was bringing down his estimates for a number of reasons.
In China, where the iPhone 5 is launching today, Milunovich said that his sources say they don't expect the latest version of the Apple smartphone to sell as well as the iPhone 4S, its predecessor.
Supply checks, Milunovich said, also show the iPhone's manufacturing rate has fallen for the quarter ending in March.
Perhaps more importantly, Milunovich said Europe's economy and tougher competition against the iPhone made him think his previous estimates were too aggressive.
As for the iPad, Milunovich said the iPad mini appears to be cannibalizing sales of the larger iPad. Also, "sustaining a 20-million iPad run rate isn’t easy," he said, according to Forbes.
Apple shares were down about 3.5%, to $511, in early trading.