iPhone Production Going Down — WAAAAY Down?

The House of Jobs is minting less iPhones these days.

According to a report by Friedman Billings Ramsey analyst Craig Berger, Apple has cut fourth quarter iPhone production not by the expected sequential drop of 10%, but a possible 40% as compared to Q3.

Right off the bat, there are several valid explanations.  Production cuts don't necessarily mean a corresponding drop in demand.  Apple may have actually overproduced in Q3, and has enough stockpiles that they can throttle back on production a bit.  In fact, Apple shipped 6.9 million iPhones in its September quarter, but that
included 2 million iPhones in channel inventory in 30,000 distribution
points.

On the other hand, the lousy ecomony isn't helping.  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.

[Via Silicon Alley Insider]