Apple lowers iPhone 3G Production. It's the Global Economy, Stupid

It looks like the financial crisis and the resulting global economic downturn is taking a toll on Apple's iPhone too. Although last month Apple recorded record breaking sales of iPhones in its fourth quarter, it does not look like the spectacular sales for iPhones may continue this Christmas season.

Financial Analyst Craig Berger stated that his checks of iPhone supply chain indicates that iPhone production is falling 40% in the coming quarter compared to previous period. That means the factories in China are pumping out less iPhones per day. The analyst also suggests this may not be an iPhone specific event. All smart phones may be subject to less production, and perhaps less sales as the world suffers from economic turmoil.

"We believe Apple is a good proxy for broader consumer demand given that it has the hottest, sleekest, most desirable products available today," he wrote. "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."

Still, even with the economic hardship, Apple is quickly accumulate a large share of the smart phone market, becoming a real threat to RIM's blackberry. The smart phone market is also poised to grow as Techcrunch indicated that 19% of Americans uses a smartphone instead of a reagular cellphone. There have even been reports that those in the lower economic spectrum are buying the cool iPhone 3G instead of cheap o' cell phones. Perhaps during this downturn, Apple can grab as much marketshare as possible and squeeze out its competitors!