Cheaper iPhone on the way, says analyst

SAN FRANCISCO—A lower-cost version of Apple Inc.'s popular iPhone, unofficially dubbed the "iPhone Nano" by some, could be hitting stores by the second quarter of 2009, according to a Wall Street analyst.
In a research note published Wednesday (Dec. 31), Craig Berger, an analyst with FBR Capital Markets, said contacts within the electronics component channel see several new Apple products coming in the first part of next year, including a less expensive MacBook and a new, smaller version of the iPod Shuffle.
Berger said channel checks indicate that Qualcomm Inc. has apparently replaced Infineon AG as the baseband supplier to the iPhone.
Berger revised downward his prediction for fourth quarter iPhone production, saying he now expects it to be down 53 percent from the third quarter. He said he expects iPhone production to decline 8 percent further in the first quarter of 2009.
However, Berger said checks indicate that the magnitude of production cuts for all Apple products is lessening and that order patterns among component suppliers may begin to stabilize somewhat compared with the past few months.
These checks are slightly positive news for Apple PC chip suppliers like Intel Corp., Marvell Technology Group Ltd., LSI Corp. and Nvidia Corp., Berger wrote. The news is neutral for iPhone chip suppliers like Broadcom Corp., Marvel, Linear Technology Corp., National Semiconductor Corp., Triquint Semiconductor Inc. and Skyworks Semiconductor Inc., Berger wrote.
Berger called the fundamental risk/reward dynamics for these stocks attractive for intermediate-term investors and said FBR believes a fundamental bottom for them may form in the fist half of 2009. Distributors may replenish component inventories sometime next summer, he said.


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