Apple Slashes iPhone Production

From Silicon Alley Insider
November 3, 2008 10:30 AM


Is demand slowing for Apple's (AAPL) red-hot iPhone 3G?

Apple has cut its Q4 iPhone production plans significantly more than originally estimated, according to Friedman Billings Ramsey analyst Craig Berger. Instead of a 10% sequential production drop in Q4, Berger's "recent checks" suggest Apple's iPhone production could fall "more than 40%" from its Q3 levels. Berger thinks a similar cut was made for Q1, but notes that there's still plenty of time to change that.

What does this mean? A significant production cut isn't necessarily a direct reflection of significantly slowing iPhone demand. And it's possible that Apple's Q3 production was higher than normal on purpose. But it's certainly not good news. Further, Berger notes that the iPhone cuts are "a negative global demand" signal:

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. This is a negative signal for global demand, in our view.

Apple shipped 6.9 million iPhones in its September quarter, but that included 2 million iPhones in channel inventory in 30,000 distribution points.

Related Posts :

1. Mobile Video Market Still Growing
2. Internet Market Share by Operating System per October 2008

Sources :

Silicon Alley Insider: Apple Slashes iPhone Production, Says Chip Analyst (AAPL), November 3, 2008 10:30 AM

Please Note!

This is generally never true. Before buying or selling any stock you should do your own research and reach your own conclusion. See my Disclaimer on the bottom for more information.

You are welcome to republish this article, or any portion thereof.
Please, cite the actual/original source. I would be grateful if you could link back.