Apple (AAPL) investors received more cause for alarm late Thursday evening as new research suggested consumer interest in Apple’s popular iPhone lineup may have peaked. Shares of Apple were down more than 25% last month from a September high of $705.07 as investors began to panic about Apple’s future. The stock has bounced back slightly since late November, however a new report questioning Apple’s biggest money-earner could sour investor sentiment yet again.

UBS analyst Steve Milunovich trimmed his estimates for Apple’s fiscal 2013 and fiscal 2014 years on Thursday evening. He also dropped his price target on Apple shares to $700 from an earlier target of $780.

The analyst trimmed his iPhone sales estimates by 5 million units this fiscal year, and iPad sales estimates were cut by 2 million units. But the most alarming part of his note comes in the form of an observation from his supply chain sources.

“Some of our Chinese sources do not expect the iPhone 5 to do as well as the iPhone 4S,” Millunovich wrote.

The UBS analyst sees iPhone production dropping to 25 million units in the first calendar quarter next year, which doesn’t bode well at all for June-quarter sales. Apple could get an early pick-up in 2013, however, as earlier reports suggest Apple might launch a refreshed iPhone 5S next summer.

Milunovich now sees Apple earning $47 per share in fiscal 2013, down from his earlier estimate of $51.50, and he believes fiscal 2014 earnings will total $55.85 per share, down from $62.

Shares of Apple were trading down more than 3% at $511.76 during Friday morning’s session.