QUALCOMM, Inc. QCOM 0.77%’s presence in the new iPhone 8 may be significantly smaller than in previous models.

According to Rosenblatt Securities analyst Jun Zhang, share gains among Chinese OEM will not be enough to offset Qualcomm’s declining Apple Inc. AAPL 0.36% iPhone share.

In a new note, Zhang downgraded Qualcomm to Neutral after supply chain checks revealed Qualcomm’s iPhone share may have declined from 60 percent to only 35 percent for the upcoming iPhone 8.

While Qualcomm will likely benefit from exposure to SAMSUNG ELECTRONIC SSNLF’s S8 and Chinese OEMs, Zhang sees iPhone share as the most meaningful metric.

“We continue to believe Qualcomm will gain market share in China this year through the Snapdragon 835, however, as Samsung’s 10nm yield rate improves slower than expected, Chinese OEMs are only able to receive supply in late-Q2 or early Q3,” Zhang explains.

Looking ahead to the second half of 2017, Rosenblatt sees declining Apple share as the primary headwind for Qualcomm stock. The firm estimates…

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