(Reuters) – Slowing smartphone demand is likely to impact growth at Apple (NASDAQ;) and Qualcomm (NASDAQ.) According to J.P. Morgan analysts, the company was dropped from their list of preferred stocks.

As analysts fear that new China coronavirus blockages and rising prices of goods caused by the conflict in Ukraine could reduce smartphone demand, the brokerage has removed the “Analyst Focus List”.

Analyst Samik Chatterjee suggested that moderate consumer spending could temper the higher expectations following the iPhone SE launch. A slowdown in China’s gaming may also impact Apple’s services.

Apple already plans to decrease iPhone production and AirPod production in response to slower demand, according to Monday’s newspaper report.

Chatterjee stated that Qualcomm will be the most vulnerable in the market for Android smartphones with low- and mid-end prices.

His statement was “Explainable noise has been made about the demand weakening in global tech,” but he stated that the sector’s macro weakness will affect the end-markets of consumers more significantly.

The brokerage still rates Apple and Qualcomm “overweight” — the equivalent of a “buy” rating — based on their longer-term potential.

J.P. Morgan stated that in an environment where consumer demand is slowing, it added network equipment companies to its company list Arista Networks (NYSE: Ciena (NYSE:) In the hope of more resilient spending on telecom and cloud-related products.