By Sam Oliver

Published: 09:00 AM EST

A 4GB version of the iPhone once rumored to play a major role at Wal-Mart discount chains was a no-show in 2008, though one Wall Street analyst now says there's evidence the device may turn up this year.

Previewing Apple's earnings report due next Wednesday, UBS's Manyard Um said he's concerned that iPhone shipments for the December holiday quarter could come in below his 5 million unit estimate, representing a considerable sequential decline from the 6.9 million units shipped during the September quarter.

However, "our UBS semis team and our checks indicate a new 4GB iPhone which may be helping to increase build rates," he wrote in a report to clients. Specifically, Apple's said to have placed manufacturing orders for 7 million iPhones in each of the first two calendar quarters, 5 million in the third quarter, and 4 million in the fourth quarter, all of which are seen as "relatively good numbers."

Still, the analyst took pause to caution his investment clients over the volatility of these said build rates, which "have seen cuts in the past and may change" or drive volume iPhone shipments at the expense of the company's historically high average selling prices (ASPs) and gross margins.

"Additionally, sell-through remains a concern and although we think a 4GB version would stimulate demand, we think it would likely cannibalize both the 8GB & 16GB models and the iPod Touch to a lesser extent," he added.

Based on some quick number crunching, Um estimates that pure cannibalization by a potential 4GB iPhone with no incremental elasticity would negatively impact fiscal year 2009 pro forma per share earnings by $0.27. However, should the advent of a 4GB model drive an incremental 1.5 million unit sales, it would offset this impact assuming Apple maintains 40 percent profit margins on the device, he said.

That's a big if, according to the analyst, who said his "main concern remains the potential macro impact on Apple's business given its high ASPs." Although recent MacBook refreshes helped drive some momentum last quarter, he remains "concerned that consumer spending will ultimately hit Apple’s high-end products more materially," potentially applying downward pressure to ASPs and gross margins.

For the just-ended December quarter, Um expects revenues to fall within the guided range of $9-$10 billion thanks to the MacBook refreshes and reseller holiday promotions. He sees gross margin coming in better than the 30-31 percent guidance due to better-than-expect commodity pricing, and estimates per-share earnings to be at or above the high end of the guided $1.06-$1.35 range.

In his report to clients, Um did not specify the breed of iPhone that's rumored to arrive with 4GB of storage, and there's an outside chance his findings could be related to persistent reports of an "iPhone nano," which was most recently rumored to be a device that may cater to international markets that demand certain concessions on Apple's part.

In December, there were also rumors that discount chain Wal-Mart would begin selling a 4GB iPhone at a greatly reduced price of $99. The reports did not materialize.

UBS maintains a Neutral rating and $110 price target on shares of Apple.

Separately on Wednesday, JPMorgan analyst Mark Moskowitz lowered his price target on the Cupertino-based company to $102 from $104, citing weakening demand for the iPhone overseas.

"Our conversations with industry contacts suggest that U.S. demand pull for iPhone has held but that Europe has softened," he said.