iPhone 5 rumors: Apple cuts down iPhone production ahead of refresh, analyst says

Sterne Agee analyst Shaw Wu estimates that Cupertino is cutting down production on its current iPhone in anticipation of its next flagship device, AppleInsider reports.

The company has reportedly reduced production by 20% to 25% from the 35.1 million units shipped last quarter.

The analyst believes that the reduction isn’t explained by consumer demand “but rather due to the upcoming 6th generation iPhone refresh likely in the September-October timeframe.”

“It appears that Apple is opting to be conservative with its suppliers to factor in a potential two-quarter pause ahead of the refresh and also to manage inventory,” Wu writes.

“We believe this helps explain why its June quarter guidance was somewhat more conservative. We would also like to note that consensus last year grossly underestimated the impact of a pause and inventory drawdown ahead of the iPhone 4S refresh where estimates were significantly off.”

Wu estimates that Apple will ship between 26 million to 28 million units, below analyst expectations that were closer to 30 to 31 million.

As for the iPad, the analyst raised his estimate from 14 million units up to 15 million, which is above consensus.