FBR Says Apple Cutting Q1 Production of iPod, iPhone

Apple (AAPL) has reduced its production plans for the iPod, the iPhone and the Mac, according to Friedman Billings Ramsey chip analyst Craig Berger.

In a research note Tuesday, Berger writes that “recent checks show that Apple has cut both its iPod and iPhone build plans for calendar 1Q.” He says that for both iPods and iPhones, Apple was previously targeting a roughly 50% sequential decline in units produced, but that the company is now targeting a 60% decline.

Berger says the iPod Touch has seen the largest negative revision versus checks last month, “suggesting demand pull for this part has fallen off versus prior expectations.”

Berger says that the trend is negative for both Broadcom (BRCM) which sells the touch-screen controller for both the iPhone and the iPod, and for Marvell (MRVL), which sells WiFi chips for the iPhone.

As for the MacBook, Berger says Apple has cut its calendar Q1 build forecast to down 50%, from down 35%. But he says the company has increased its forecasts for the iMac, going from flat to up 35% quarter over quarter.

Apple Wednesday is down $4.92, or 3.8%, $124.44. Marvell is down $1.05, or 8.9% or $10.72; Broadcom is down 88 cents, or 4%, or $20.94.

Comments

[Richard Alv...:]

Psst. No one tell FBR about the new iPod touch. Or the new Macbook pro that will be out soon.

2008 Feb 06 04:26 PM

[larry livin...:]

Apple on Tuesday introduced new versions of both the iPod touch and the iPhone, offering double the storage of the previous high-end models for a $100 premium. It's unclear whether any said production cutbacks may have been a precursor to these new models. Similarly, it's unclear whether reductions in MacBook build orders will be offset by demand for company's new MacBook Air.

2008 Feb 06 04:43 PM

[peter02l:]

I am curious to know how this analyst came up with these percentages. Apple uses multiple suppliers and they are not know to talk too much, at least not all of them. A few months ago, some other fellow made such claims about iPod orders being cut in half. Christmas sales turned out to be just fine.

2008 Feb 06 10:34 PM

[Hayweed:]

If sales were falling off a cliff, which this article suggests, then why did Apple introduce new higher capacity ipod touch and iphone at higher prices. If the iphone has inventory problems then apple would have cut the price on the iphone 8 gb and introduced the 16gb iphone at $399 instead of the $499 that they are asking. Same with the touch 32 gb which is at a new higher price point. This to me means that sales are good. Plus Apple ramped up the Christmas products and probably has some inventory to work off on the ipods. The laptop reduction is most likely due to a new macbook pro and the introduction of the macbook air.

This article is a classic bear raid in a weak market to drive the stock down by casting doubt on sales.

2008 Feb 06 11:29 PM

[Linda:]

Apple always decreases production when they're introducing a new product in the line that could take some of the sales, or updating the line.

Also, I'd like to see the source material that Eric Savitz used; if he'll share it with us? I posted such a request this morning and it seems to have been removed, censored?

2008 Feb 07 01:15 PM

[jerry on hi...:]

I too, would like to know the source of the information about decreased production. Is the author or anyone related short Apple?

2008 Feb 08 03:46 PM