IPhone 7 demand falling in China, UBS says

A customer inspects two Apple iPhones at an Apple Store in Shanghai, China.
Qilai Shen | Bloomberg | Getty Images

UBS told investors that Chinese interest for the iPhone 7 is waning.

The firm cited its latest proprietary survey of smartphone consumers, but reiterated its buy rating on Apple shares due to its attractive valuation and strength in U.S. demand.

"This time we find higher overall smartphone purchase intentions the next six months with iPhone 7 interest especially strong in the US and rising demand for the Plus," analyst Steven Milunovich wrote in a note to clients Monday.

"However, China, is exhibiting signs of softness in F17, including lower interest in the 7 than the 6/6s."