Analyst says iPhone production may be cut

A man holds his new Apple iPhone 3G at Telcel Center in the eastern Indian city of Kolkata August 22, 2008.

SAN FRANCISCO (Reuters) - FBR Capital Markets said on Monday that production of Apple Inc's iconic iPhone might plunge more than 40 percent in the fourth quarter from the previous period.

"Previous checks indicated that iPhone production would fall about 10 percent sequentially in calendar 4Q," said FBR's note by Craig Berger, "(but) our new checks indicate that iPhone production could fall more than 40 percent sequentially in 4Q."

An Apple spokesman was not immediately available for comment.

NPD Group analyst Ross Rubin said: "To cut volume by 40 percent would be dramatic."

FBR's Berger said his findings were a "good proxy for broader consumer demand."

Van Baker of Gartner said that if there were such a cut, it might reflect Apple's ramp-up of delivery to countries outside the United States.

While the company needed to produce many phones to fill the supply chain overseas, he said, all it now needs to do is meet continuing demand, which may be tapering off.

Such a cut "could end up painting an ugly picture, but not as ugly as it seems on face value," Baker said.

Apple reported a stronger-than-expected 26 percent rise in quarterly profit last month, spurred by sales of the iPhone. The company sold 6.89 million iPhones in the quarter, outpacing BlackBerry maker Research in Motion Ltd.

(Reporting by David Lawsky; Editing by Lisa Von Ahn)