Apple may have to cut production of its 3G iPhone by up to 40 percent during the final quarter of this year - writes Craig Berger, an analyst at FBR Capital Markets, an investment bank.

"That the firm's iPhone production plans are being revised lower suggests that the global macroeconomic 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," he wrote in an investment note.

He has form, having previously warned that the company may cut production by ten percent as customers cut plans to buy the more expensive smartphones. He also cut forecasts for suppliers to the iPhone.

Apple had warned that the current economic climate could affect future sales of all its products, but certainly did not predict a slow-down of the scale that Berger is looking at.

It is worth noting that there have been previous reports that Apple's suppliers were ramping up production sharply, and any cut-back now could be a simple move to reduce an existing large stock holding so that the firm is able to maintain strong sales during the holiday period without an inventory overhang in 2009.

Earlier today, IDC warned that mobile phone average selling prices (ASPs) have already begun to drop this year. Competition for buyers will remain high, as consumers will be spending more carefully during the peak holiday period. However, slower growth in the third quarter and tight economic conditions will make 2009 slower and more competitive.

Source:cellular-news