FBR Capital Markets analyst Craig Berger attracted attention today with a research note stating that Apple may be cutting iPhone production much more dramatically than initially expected.
Berger said that his ???checks??? indicate that Apple may not be cutting its production by just 10% as previously estimated, but by as much as 40% compared to Q3 levels. Apple said it sold more than 6.89 million iPhones in the third quarter of this year, but it is unknown how many iPhones the company actually had ordered during the quarter. Apple told analysts that company had about 2 million iPhones in the global channel at the end of Q3; but ultimately, Berger??™s estimate cannot be used to point to a certain production number.
The obvious explanation of this production cut, if in fact is true, is the troubled economy and Apple??™s reaction to consumers cutting back on their expenses.
However, there are other explanations as well: Apple may have produced many more iPhones in Q3 than it actually needed - in an effort to stock the global channel and ensure supply. If that is the case, Apple may simply be trying to reduce its inventory. There is lots of uncertainty how the Christmas quarter will turn out for IT companies, but economists currently seem not to believe that 2009 will be a particularly easy year. In that perspective, Apple could be simply preparing for tougher times.
Source: TG Daily