Apple to Cut IPhone Production by 40%?

This is not good news for the companies that are making the IPhone innards.

Craig Berger, an analyst with Friedman Billings Ramsey, said Cupertino-based Apple (NASDAQ:AAPL) could cut back production by up to 40 percent in the fourth quarter compared with the previous quarter.

His assumption is based on channel checks I assume. The stock hardly moved today so perhaps Berger is more of an outlier then the median. A 40% drop in IPhones sold would be quite a blow to the company as IPod sales seem to be slowing.

iPhones shipped during the quarter reached 6,892,000, which Apple notes is several times the 1,119,000 delivered in 2007.

That would mean that a 40% cut in IPhone production would drop this number by 2,756,800 phones at about $200-$300 profit per phone. So if this analyst is correct then Apple will be out $551 million to $827 million in their bottom line this coming quarter. You would think that information would torpedo the stock but it was down only $0.63 today. I think there may be some pullback in production but 40% seems like way too much to me.