Apple Likely To Cut iPhone 3G production by 40 percent!

There are speculations going on in the market that Apple might cut production of its red-hot iPhone 3G handset by up to 40 percent during the current quarter!

According to Craig Berger, who is an analyst at FBR Capital Markets, an investment bank:

“That the firm’s iPhone production plans are being revised lower suggests that the global macroeconomic weakness is impacting even high-end consumers, those that are more likely to buy Apple’s expensive gadgets, and that no market segment will be spared in this global downturn,”

Sounds pretty scary. But perhaps best taken with a grain of salt, given Berger’s track record with Apple,” he wrote.

Apple iPhone

“While our previous checks indicated that iPhone production would fall about 10% sequentially in calendar Q4, our new checks indicate that iPhone production could fall more than 40% sequentially in Q4,” Craig Berger and Robert Pikover, FBR Research analysts, wrote in the report.

“We believe a similar amount of production was removed from the calendar Q1 build forecast, though there is still plenty of time to modify that forecast should further revisions be necessary,” they stated.
“We believe Apple is a good proxy for broader consumer demand given that it has the hottest, sleekest, most desirable products available today,” Berger and Pikover said. “That the firm’s iPhone production plans are being revised lower suggests that the global macroecomomic weakness is impacting even high-end consumers, those that are more likely to buy Apple’s expensive gadgets, and that no market segment will be spared in this global downturn.”

However, Apple was sounding a bit cautious last month when it released fiscal 4-Q results, citing an unpredictable economic ambiance.

“Looking ahead, visibility is low and forecasting is challenging, and as a result we are going to be prudent in predicting the December quarter,” the company said in a press release.
The company shipped 6.9 million iPhones in the month of September, but the figures include 2 million iPhones in channel inventory in thirty thousand distribution points.
“Apple is a proxy for broader consumer demand; iPhone cuts a negative global demand signal,” Berger and Pikover said. “… This is a negative signal for global demand, in our view.”