"Moreover, we see growing risk of even softer iPhone unit demand, with downside in China, India and other emerging markets, where Apple may need to start considering lower price points," the analyst added.
UBS cut its 12-month price target on Apple to $225 from $240 and lowered its iPhone unit sales estimates for the current quarter to 73.5 million from 75 million.
Apple shares dropped by 5 percent on Monday alone after one of its suppliers, Lumentum (LITE), said one of its largest customers reduced shipments. The company makes 3D sensing lasers used in Apple's FaceID technology. That's raised concerns iPhone sales are weakening.
"We note these cuts are significantly less than the LITE news would imply," said Tim Arcuri of UBS in his note. "Ultimately, we believe AAPL continues to face FX headwinds given ongoing [U.S. dollar] appreciation against key global currencies. In China, given [the dollar-yuan trade], the supply chain suggests many consumers are opting for high-end models w/similar specs from local competitors rather than the XR."
On Tuesday, Goldman Sachs cut its iPhone estimates and lowered its price target on the stock to $209 from $222 following the Lumentum move.
"We are concerned that end demand for new iPhone models is deteriorating," Goldman said in the note. "We note this could easily right itself given the bulk of demand comes in late December but we feel more prudent sell through forecasts are warranted due to the timing and magnitude of this warning."
Apple began the month by reporting iPhone shipments that missed Wall Street expectations for the quarter. The company also said it would no longer break out sales figures for iPhone units.
— With reporting by CNBC's
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