Credit Suisse analyst Kulbinder Garcha is again lowering Apple (NASDAQ: AAPL) CY16 iPhone estimates by 8mn units, to 214mn, and CY16 EPS estimates by 4%, following weakness in the supply chain.

"Our own checks and Dialog's recent pre announcement, as well as research from our Asian team, suggest a deeper cut in December and March production volumes," Garcha said. "The cuts seem to be driven by weak demand for the new iPhone 6s, as overall builds are now estimated to be below 75-80mn units for the December quarter and between 45-50mn units for the March quarter. In light of this, we adjust our December and March quarters slightly to 77mn/52mn, and we have lowered our CY16 units to 214mn, from 222mn, to reflect this and assume 231mn for 2017 (8% growth y/y)."

The firm is also lowering global smartphone estimates and see limited revenue growth ahead.

However, despite the near term pressures the analyst sees a solid outlook for iPhone business long-term. "While the near-term pressures exists, we note several factors are important when assessing the outlook for the iPhone business. First, based upon our installed base analysis, we believe that the iPhone installed base will grow to 610mn over time driven by its recent expansion (24% in the past year). Second, the new installment plans over time will drive higher units long-term. Third, we note that Apple's recent capex guidance and purchase obligations suggest our iOS units have 33% upside (providing some evidence that it may intend to launch a 4-inch screen device)."

The firm maintained an Outperform rating and price target of $140.

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Shares of Apple closed at $110.49 yesterday.