UBS warns of 'near-term' iPhone weakness as data shows Apple being cautious with inventory

An employee rings up an iPhone smartphone at an Apple store in New York.
John Taggart | Bloomberg | Getty Images

UBS on Tuesday cautioned of near-term weakness in iPhone sales, a trend that could put a dent in Apple's biggest source of earnings.

"Procurement estimates for F1Q-2Q/17 [Fiscal quarters 1 and 2 in 2017] are down YoY [year over year], putting current consensus estimates for unit shipments growth in Dec and Mar at risk. We still believe the guide for Dec implies at least moderate unit growth," equity analyst Steven Milunovich wrote in a note to clients.

In the past four quarters, iPhone sales accounted for about 63 percent of Apple's total earnings, according to data from FactSet. The stock is off 6 percent this year, compared with a gain of 8 percent for the S&P 500 index.