Apple Cutting Q4 iPhone Production?

[MacRumors]

AlleyInsider reports on a new analyst report from Friedman Billings Ramsey which claims that Apple's iPhone production could fall "more than 40%" in the 4th Quarter of 2008. AlleyInsider points out this may simply represent a surplus of iPhone production from Q3 2008 and the decrease in Q4 is to adjust inventory to match demand.

Another contributing factor is believed to be the recent economic downturn:

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.

The analyst bases his findings on "recent checks" on the chip industry. The news comes shortly after Apple reported record iPhone earnings capturing 2.3% of the mobile phone market.

Article Link: Apple Cutting Q4 iPhone Production?

[autumn]

They've sold enough already....makes sense...

[jacekwo]

Friedman Billings could be trying to get some attention to themselves since their stock is crazy in the crapper.

[Daniel0418]

Originally Posted by autumn

They've sold enough already....makes sense...

No guys... The assumption that apple is affected by our economy is ridiculous! APPLE IS STILL AMAZING!!! I don't care how bad me and my family are doing at home I will still purchase apple products because I am a fan boy! Don't worry apple we will give up our lives for you!!!.... ugh! I can't wait for the flood of comments argueing this topic.... Is apple a company in the U.S.? Is there stock lower? Could sales be higher? YeS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! They ARE affected so shut up!

[mdriftmeyer]

Classic: The guy predicts a slow down based upon other competitors performance projections?

[BenRoethig]

Considering that iPhones counted for 40% of Apple's revenue in Q4, this could create the illusion of a bad quarter for Q1, especially since Q4 was artificially inflated with the result of a year and half of iPhone sales.

[Mac Maven]

As long as Apple isn't seeing negative trends in the iPhone market, it's good that production is being reduced concomitant with the macroeconomic scene. Long ago Apple caused itself fiscal issues by stuffing the channels with excess Mac inventory.

[jlwillia]

On the subject of iphones, of course demand will be less today than it was before this whole meltdown. Simple economics will tell you that discretionary goods such as phones, ipods, and high-end computers (mostly what apple produces) WILL be affected by the economic slowdown. Those of you who are "fanboys" and will buy these things regardless are either (1) rich enough that the economic slowdown doesn't bother you; (2) protected from the economic slowdown perhaps because of the industry you work; (3) not very financially wise.

[gifford]

doesn't some moron say something similar this time every year (and be proved wrong)

[Delicious-Apple]

I wonder if we'll be seeing a 32Gb iPhone around January to push us through until a 3rd Gen iPhone in Summer 09. It should be interesting to see where they go from here on out. The iPhone is rolling out in lots of different countries, they are bound to be lining up something to sustain interest/sales.

3G iPhone at $99
3G iPhone with added software/service value
Storage bump
New iPhone with iSight camera
New iPhone with better stills camera
iPhone Nano

We shall see...

[BarcelonaApple]

Another day, another prediction from analysts.

[AW.kennedy]

well it makes sense, most people would get this device when it came out. its not like you'd need constant production when its on a 18-24 month contract.

[zombitronic]

These guys are rarely right and most often sensationalists looking for attention. What's up with this making Page 1?

[ipedro]

I wonder why the article doesn't speculate that we may be seeing a reduction in the production of the current iPhone because there may probably be an update coming in January.

With MacBook's and allegedly the iMac and Mac Mini seeing an update before MacWorld, I'd suspect that Apple is going to talk about a new iPhone size (32GB) and different back colors.

A combination of the existing stock and the reduced production can be supplemented by the new 32GB and new colors.

[Mitch1984]

This is probably because of the following:

They either have enough iPhones to last a while, whilst still selling at a decent rate.

OR

They are going to deliberately run down stock so they can launch a 32GB iPhone.

But watch the investors still panic.
Could be that they're selling less, but probably not.

[samab]

Originally Posted by mdriftmeyer

Classic: The guy predicts a slow down based upon other competitors performance projections?

Not exactly, this guy is a silicon chip analyst --- he covers Intel, AMD, Broadcom, Marvell, Infineon...

If the chipset makers are making fewer chips, then we are going to see fewer phones.

[rickag]

40% cut back seems high. I thought Apple was still adding more countries to sell the iPhone in.

[plokoonpma]

That moron is suggesting that Apple customers behave as the others. No real proof at all to say there will be a cut on production.
Is like someone say, oh we predict SUV's will be affected cause the bad economy.
That dude need another job

[tjcampbell]

When will they be pushing for the next iphone?

[samab]

Originally Posted by plokoonpma

That moron is suggesting that Apple customers behave as the others. No real proof at all to say there will be a cut on production.
Is like someone say, oh we predict SUV's will be affected cause the bad economy.
That dude need another job

This guy covers chipset makers --- if chipset makers make fewer chips, then you are going to see fewer phones.

[plokoonpma]

Originally Posted by samab

This guy covers chipset makers --- if chipset makers make fewer chips, then you are going to see fewer phones.

Generally when there is a shortcut of any sort, the reports come from China, supported by proof or trusty leak from one of the factories.
Apart from the fact that Apple iPhone chips are in most cases custom made. Motorola, LG, Nokia and the others do not share more than 35% of the chips used on the iPhone.
So that dude is speculating in other stuff that came straight from his imagination.

[nos]

Strange that in Belgium there is not one iPhone in the stores.
You still have to order them.

[notjustjay]

Well I can tell you that I am not buying an iPhone yet and the reason is strictly economy-related (and poor practices by Rogers/Fido, the iPhone carrier in Canada).

I need to pay $30/month on top of my voice plan for 1 gig of data, and I need to lock into a 3-year contract in order to do it.

I'm just not willing to pay that much, and be locked into it for 3 years. However you think of it, it just doesn't seem smart right now. In 3 years there could be a new 64 gig iPhone G5, and I'd be stuck. Or in 3 years the economy could be in the dumps, and I'd still be stuck.

So thank you Apple, for creating a fantastic product -- it's just too bad I won't be buying one because of our monopolistic carrier.

[137489]

Economic downturn is onething, but we all know apple....

Considering this guy is a chip analyst, maybe this is more true.

1. Purchase of PA Semi
2. That Papermaster guy from IBM coming on board
3. Macworld just about 2 months ways

Could be that Apple stopped or slowed down due to using other or their own made chips?

New iphone and other products in the works - doesn't apple slow down production and run out the inventory just before something new is released?

would kinda make sense if they are planning something for MWSF.. Otherwise with the ipods in Sept, notebooks in Oct, rumored imac/pro (maybe mini) update for november - that would only leave new iphone and new products for MWSF....

Just a thought.....

[kmcrawford]

This is the first news I've heard that the economy is effecting Apple. Perhaps now they will consider a low(er) end MacBook or revamping the Mac Mini. Any thoughts?