A new research note from Nomura Instinet analyst Jeffrey Kvaal tries to make the case that shares of Apple are in for a rude awakening over the next few months. Even though Apple delivered a stellar earnings report last quarter, and even though the iPhone X outperformed most analyst projections, Kvaal takes the tried and true analyst line and articulates that iPhone X demand is lukewarm and that Apple’s bottom line will take a hit as a result.

“iPhone volumes are not deteriorating though iPhone X remains uninspiring,” Kvaal wrote in a note obtained by CNBC. “Apple guidance implied third fiscal-quarter iPhone unit volumes that were better than feared. We do not believe, however, sell through has meaningfully improved.”

It’s an interesting, though not altogether surprising, perspective given how bearish many analysts tend to be when it comes to Apple. Indeed, it’s the reason why the narrative that we’ve reached ‘peak iPhone’ has persisted for a number of years at this point.

As to why Kvaal is bearish on the iPhone, he notes that upgrade rates among iPhone owners are longer than they’ve been in the past. This is a fair point, but Apple’s large and growing installed base of users somewhat offsets this dynamic. Additionally, part of the reason upgrade rates have elongated is because the iPhone form factor itself has largely remained unchanged since 2014’s iPhone 6 lineup. Sure, the iPhone X introduced a brand new design, but the device’s $999 entry price likely kept many interested buyers away.

Kvaal also writes that revenue from Apple’s services division, while nice, perhaps isn’t all its cracked up to be.

“Apple has made several sustainable improvements to the Services growth trajectory,” Kvaal added, “[but] we believe the tailwind from licensing and from AppleCare may ease in coming quarters. … We would appreciate better disclosure from Apple on its Services business to help gauge revenue growth.”

It’s hard to even make sense of this, really. Sure, Apple doesn’t break out individual revenue streams from its Services division, but the numbers speak for themselves. Case in point: revenue from Apple’s suite of services jumped by 31% year over year. Over the last two years, services-based revenue jumped by more than 53%. In fact, revenue from Apple services is large enough as to be the equivalent to a Fortune 100 company.

And yet, curiously, Kvaal remains skeptical without really articulating a reason why.

All that said, Kvaal maintains a neutral rating on Apple shares with a price target of $175. Incidentally, shares of the company are currently trading at $187.

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