Apple Supplier Sees Cutbacks

An Apple (AAPL Quote) supplier says the tech giant cut orders last month in preparation for a slowdown in consumer spending.

Catcher Technology, one of the suppliers of light metal exteriors for Apple's iPods, reported a 45% sequential monthly decline in December sales. The drop was 30% below year-over-year levels and much steeper than the single-digit decline that had been predicted.

According to an analyst's note, Catcher blamed the shortfall on an "inventory adjustment by Apple" and Apple's "more conservative view toward macro economics slowdown."

Catcher was unavailable for comment, and an Apple representative declined to comment.

Production cuts are common going into the post-holiday season, as consumer electronics players seek to avoid big inventory pileups. But if Catcher's information is true, the order cuts suggest inventory reduction goals that are below normal seasonal levels.

It's also unclear whether production rates reflect perceived demand trends or merely product changes.

For example, in July TheStreet.com reported that Apple cut its iPhone production in half. Two months later, the company announced it was discontinuing its 4-gigabit iPhone, roughly half its lineup.

Apple shares were down $6.09, or 3%, to $188.84 amid widespread selling Friday.