NEW YORK (TheStreet) -- Shares of Apple  (AAPL) were declining in late-afternoon trading on Tuesday after UBS claimed that its recent survey of 6,500 consumers indicates demand for the company's iPhone 7 is softening in China. 

The potential upside to iPhone 7 sales is limited by "slower upgrading and lower China interest," the firm said in a research note, MarketWatch reports.

China's interest in the iPhone 7s is lower than interest in the iPhone 6 or iPhone 6s, and Apple's retention rate has fallen in the country, UBS stated. Upgrade cycles are longer as just 43% of Apple's customer base upgrades in two years vs. the typical 50% to 60% of users who upgrade over that period, the firm added.

UBS nonetheless reiterated a "buy" rating and $127 price target on the stock.

The firm mentioned that nearly half of U.S. respondents are likely to buy an iPhone 7 as they increasingly shift toward the iPhone 7 from the iPhone 6, Barron's reports.

Apple has unique products and the potential for new customers, and consumers are less likely to purchase from its rival Samsung (SSNLF), UBS added. 

Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of A.

Apple's strengths such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and notable return on equity outweigh the fact that the company has had sub par growth in net income.

You can view the full analysis from the report here: AAPL

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author. 

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