Falling in line with analysts this morning, a new investor note from research company Nomura Instinet today outlines how the rising price of the iPhone could spell trouble for Apple. In the note, obtained by CNBC, analyst Jeffrey Kvaal writes that he sees “trouble” at the high-end of the market for Apple…

Kvaal says that his demand checks indicate that there has been “little improvement in iPhone demand” thus far in 2018. The analyst goes on to say that downticks in the supply chain suggest that iPhone sales expectations have yet to bottom out:

“Our demand checks suggest little improvement in iPhone demand in 2018. Corresponding supply chain downticks suggest iPhone expectations have yet to bottom,” the note from Kvaal reads.

Furthermore, Kvaal says that there are signs of trouble for the high-end smartphone market all around, noting that the market elasticity is falling – meaning customers are less willing to adapt to price changes.

For instance, he notes that AT&T’s buy one, get one free promotion for the iPhone X “didn’t do well and was retraced after two weeks.”

“We do not believe it is coincidence that the highest end of the product portfolio, the X, is the model that is flagging,” he wrote. “The China domestic vendors may be focusing on the mid-tier of the market. These datapoints align with the theory that smartphone ASPs may be bumping up against their upper limit.”

The struggles don’t appear limited to Apple, though, with Nomura Instinet’s Korean analysts saying preorders for the Samsung S9 are down 30 percent year over year.

Ultimately, Kvaal holds to his $175 target for Apple shares, which is 30 cents less than AAPL’s close price today. He also lowers his iPhone sales predictions for 2018 from 226 million to 221 million, which is lower than the Wall Street consensus of 224 million.

These sort of analyst notes should be taken with a grain of salt, though this isn’t the first time we’ve heard Apple’s higher prices may be hurting sales – especially in more price-sensitive markets like China and India. Whether the company acknowledges that, of if the issues are legitimate, remains to be seen.

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Chance Miller

Chance is an editor for the entire 9to5 network and covers the latest Apple news for 9to5Mac.

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