In a note to investors on Friday, Ming-Chi Kuo has revised his first-quarter iPhone sales estimate from approximately 50 million units to between 38 million and 42 million, according to a 9to5Mac, which obtained a copy of the note. Kuo added that he now believes Apple (aapl) will sell between 188 million and 194 million iPhones in 2019, up to a 10% decline compared to 2018.
Kuo is a highly respected Apple analyst who has a stronger track record than most at predicting the company’s future plans. And while his forecasts are of course subject to change, they suggest some problems are afoot in Cupertino.
But Kuo’s note isn’t the first sign of trouble. Apple is still wildly profitable, but its recent quarterly earnings have indicated some softness in its iPhone business. The company’s announcement last quarter that it will stop sharing quarterly unit sales on iPhones and other products concerned investors and analysts who fear they’ll have less insight into how the tech giant is operating.
Despite cutting shipment estimates, it’s not all bad news for Apple in the Kuo note. He said that Apple’s been able to bolster its financial performance by selling higher-priced iPhones. Even with fewer sales next year, the company should still be able to protect its margins and profitability.
Apple did not immediately respond to a Fortune request for comment on the Kuo report.