Is There A Surplus Of iPhones?

Apple may have hit a home run with the iPhone during the last quarter, but analysts are suggesting that Apple is prepared to slash production of the iPhone by more than 40%.According to Reuters, NPD Group's Ross Rubin said, "To cut volume by 40% would be dramatic." Um, no kidding.

The initial report comes from FBR Capital Markets. Its analysts believe that Apple will be cutting iPhone production, and the number it provides is "more than 40%."

Apple appears to be catching up to the market demand for iPhones. Where Apple has spent the last quarter-plus churning out iPhones like crazy to ramp up the supply, demand surged between July and September. Early adopters of the iPhone have, in fact, bought one. Apple managed to sell just under 6.9 million of the devices in that time frame.

At this point, Apple needs only to maintain inventory levels. It makes sense, then, that it might ramp down production, lest it flood the market with more iPhones than people are willing to buy.