Tech titan Apple Inc. (NASDAQ:AAPL) has everyone on the Street discussing how chips will fall around its iPhone shipments, particularly with discussions of its forthcoming new model iPhone 7. While analyst Andrew Uerkwitz of Oppenheimer feels positive for the company’s key asset iPhone, he remains cautiously sidelined when it comes to outlook and changes in the market. In reaction, Uerkwitz reiterates a Perform rating on Apple stock.

As far as other estimates on the Street, Uerkwitz acknowledges that his iPhone shipment estimate for the fiscal year of 2017 is currently the lowest, falling 10% below consensus. It is Uerkwitz’s belief that “consensus might not be low enough to account for an elongated replacement cycle in FY17.”

However, Uerkwitz is 3% above street with iPhone shipment unit estimates for the fiscal year of 2018, seeing full speed ahead for Apple’s iPhone cycle. The analyst elaborates, “We are bullish on FY18 iPhone cycle due to potentially substantial changes with new aesthetics and features that enable a better mobile VR experience.”

For Uerkwitz, the risk lies in the long-term for Apple, anticipating wider swings in iPhone outlook and recognizing challenges circling, “as the smartphone shipment driver shifts from market growth to changes in market share.” Other significant challenges for the analyst regard fierce competition from Android and iOS, who have “secured their dominance on mobile,” even though Uerkwitz believes Apple has favorably differentiated itself when it comes to factors of interface, the app store, and the whole seamless ecosystem interconnecting all AAPL devices.

Uerkwitz concluded, “As a product driven company, Apple may see near-term challenges due to lack of product innovation and a broader shift of user experience from touch-interface/apps/mobile computing to voice-interface/AI (bots)/VR. Our FY17 and FY18 estimates reflect our view of the potential impact of product designs and expected user reaction to differentiating features.”

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Andrew Uerkwitz is ranked #399 out of 4,110 analysts. Uerkwitz has a steady success rate of 55% and yields 7.4% in his average returns. However, when recommending AAPL, Uerkwitz loses 8.3% in profits on the stock.

TipRanks analytics show AAPL as a Strong Buy. Based on 39 analysts polled in the last 3 months, 33 rate a Buy, 4 maintain a Hold, and 2 issue a Sell. The 12-month average price target is $124.03, marking a close to 14% upside from where the stock is currently trading.

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