Apple Inc. (NASDAQ:AAPL) will release its next quarterly earnings report on July 23, and one of the key ingredients in that report will be iPhone shipments. Unfortunately weak handset sales in the second half of this year may mean that the company will have to lower its guidance.

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Apple’s iPhone And iPad Shipments

Wedge Partners analyst Brian Blair issued a report to investors today warning that Apple Inc. (NASDAQ:AAPL) may slash its iPhone estimates for the second half of the year by as much as 20 percent. He predicts that Apple Inc. (NASDAQ:AAPL) will take its iPhone forecast to the 90 to 100 million range, compared to the company’s previous forecast of between 115 million and 120 million.

Of course if Apple does lower its guidance for iPhone shipments, that will dramatically affect its stock price, particularly because of expectations regarding the iPhone 6 or perhaps at least the iPhone 5S becoming available this year. Blair believes the damage won’t stop there however. He thinks that the lowered forecasts will also affect the prices of major smartphone suppliers like Broadcom Corporation (NASDAQ:BRCM) and QUALCOMM, Inc. (NASDAQ:CQOM)

He believes Apple Inc. (NASDAQ:AAPL) will fare well in iPad shipments however. He said he believes the company will leave them “intact.”

Will International Markets Help Apple?

Reports from other analysts are more positive on Apple Inc. (NASDAQ:AAPL), seeing help from markets in Europe and China as the U.S. smartphone market slumps. Barrons’ contributor Tiernan Ray points to a report from Cowen & Co. analyst Matt Hoffman, who believes that strong smartphone sales in Europe may help Apple Inc. (NASDAQ:AAPL) in the quarter that will be reported later this month.

There are conflicting reports about the Chinese smartphone market, according to Ray, although neither of these two reports gives Apple the edge. Blair said in his report that Chinese operators are focusing their subsidies mostly on the Korean-made Samsung Galaxy S4 rather than the iPhone, which is likely hurting Apple. Topeka Capital’s Brian White says the Chinese smartphone market is exceptionally strong, although it’s being led by Chinese vendors.

Apple’s Low Cost iPhone

Of course Blair couldn’t resist the topic of the low-cost iPhone, which has grabbed plenty of headlines. He said they continue to believe that Apple Inc. (NASDAQ:APPL) will simply “repurpose the iPhone 4” and give it a plastic backing. He said that would enable the company to sell it for less than $250 at retail.