Goldman Sachs cut its Apple price target and warned the average iPhone price is dropping

Goldman Sachs cut its price target for Apple stock from $136 to $124 in a note issued on Thursday.

Simona Jankowski and his analyst team continues to rate Apple as a “buy,” though, because Goldman’s model “implies upside to consensus estimates.”

But Goldman is less bullish on Apple than it has been previously for a few reasons.

Goldman now has lowered its iPhone shipment estimates due to general pessimism about the smartphone market.

The note also details worries about the Chinese market, which it calls the “most significant new risk” to Apple. The analysts believe that Apple’s iPhone marketshare could decline 330 basis points — 0r 3.3% — in “Greater China,” which also includes Taiwan and Hong Kong.

Finally, Goldman sounds the warning — echoing comments made by Tim Cook earlier this year — that iPhone prices may be falling, due to greater penetration in emerging markets and Apple’s new entry-level model:

We expect blended iPhone [average sales price] to decline 3%/3%/1% in FY16/FY17/FY18, primarily driven by a greater shift to emerging markets, where we expect a higher mix of lower-end SKUs such as the iPhone SE and its successors.

Shares of Apple are down less than a point in early trading on Thursday.

Here’s a chart that shows how the average price for an iPhone has dipped recently:

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