Report: Apple Cuts 4Q iPhone Production By 40%

11:38 am, November 3rd, 2008, Ed Sutherland

Apple may have cut by 40 percent fourth quarter production of its flagship iPhone handset, a Friedman, Billings, Ramsey analyst said Monday.

The drop in production would be far deeper than the 10 percent cut previously anticipated.

“Our new checks indicate that iPhone production could fall more than 40 percent sequentially in the 4Q,” FBR’s Craig Berger wrote in a note to clients.

The drop in production shouldn’t be interpreted as a dip in iPhone demand. In October, Apple reported shipping 6.9 million iPhones during the third quarter.

However, the lowered production may signal “no market segment will be spared in this global downturn,” wrote Berger.

Gauging just how deep the cut is again depends on who’s numbers you are using: Apple’s or Wall Street’s.

“Its not like they are cutting the iPhone production 40% from the Street numbers,” Piper Jaffray’s Apple watcher Gene Munster told Cult of Mac. Piper Jaffray believes iPhone production will drop 8 percent from September to December.

Munster said the 40 percent production drop is based on Apple’s own expectations. Does that mean Apple was uncharacteristically over-optimistic?

It’s something to think about, Munster told Cult of Mac by e-mail.

Posted by Ed Sutherland in Apple, News, iPhone | Comment on this article

About the author

Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

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2 comments

I think that the cut just means that Apple may have a surplus of Iphones that they want to get rid off and then follow customer demand more closely rather than manufacture a fixed amount every month.

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Serguei Fedorov, on November 3rd, 2008 at 7:03 pm

bingo. based on the last phone they figured demand would be huge in the beginning and so they did their best to keep up, then they ramp up a little for the holidays and level it off so they can focus on the new laptops, display, earphones etc.

its classic technique that a lot of companies do so it’s puzzling why it is taken as such a bad thing when Apple uses the same logic.

Lucas, on November 5th, 2008 at 9:35 am