Apple Likely to Cut iPhone Forecast: Analyst

CNBC

Channel checks suggest Apple' (AAPL)s core suppliers are expecting a 20 percent cut in orders, Brian Blair of Wedge Partners said Monday.

"So, when they make a dramatic change in their forecast, they need to let their suppliers know," he said. "And this is coming from some of our supply-chain work out of China and Taiwan that has let us know, not exactly, but that there's been roughly this kind of a change in their forecast for the period from June to December, about a 20 percent cut in what they've been telling their suppliers to be ready for."

Apple stock closed at $415.05 per share, down 0.57 percent.

(Read More: Apple Stock's Bumpy Road to $450 )

On CNBC's " Fast Money ," Blair said that "approximate numbers" show Apple was likely forecasting demand for 115 million to 120 million iPhone models, which was recently cut to about 90 million to 100 million total iPhone units.

Blair also said that he expected Apple to produce a smartphone at a lower price point.

"For the new low-cost phone, I believe that it's basically going to be something similar to what the current iPhone 4 will look like but with a plastic back instead of a glass back," he said. "That will allow Apple to sell it at a lower cost, but I do believe there will be some different parts.

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"One of the ways they can offer a lower-cost phone is if they do use the same components because those components are over four years old, and they can get them a much cheaper prices, allowing them to sell the phone at a lower cost."

Blair said that he didn't have specific information about which iPhone production lines would see cuts.

"But I think what it's going to come down to is, they're cutting overall units because I think they're reacting to what they're seeing from Samsung (Korea Stock Exchange: 593-KR)," he said.

Samsung, he added, had announced Galaxy S4 sales of 10 million units but had hoped to sell 15 million.

(Read More: Apple to 'Re-Catalyze' Stock: Pro )

"So the bottom line is, there's lots of little signs that are pointing to slowing growth for high-end smartphones, and I think Apple's reacting to that," Blair said.

Apple would likely produce a TD-SCDMA-compatible iPhone for use with China Mobile (Hong Kong Stock Exchange: 941-HK)'s network, he added.

Blair also had words of caution for the chip makers.

(Read More: Apple Stock Now a 'Strong Buy': Analyst )

"I think you have to stay on the sidelines with Qualcomm (QCOM) and Broadcom (BRCM) until we get a sense for just what these cuts mean to the core supplier," he added.

Trader disclosure: On July 8, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Tim Seymour is long BAC; Tim Seymour is long AAPL; Pete Najarian is long AAPL; Pete Najarian is long INTC; Pete Najarian is long SBUX; Pete Najarian is long FB; Pete Najarian is long FITB; Pete Najarian is long BBRY; Josh Brown is long AAPL; Josh Brown is long KBE; Josh Brown is long F; Josh Brown is long XLU; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long C; Karen Finerman is long JPM; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long MSFT; Karen Finerman is long M; Karen Finerman is long SPY; Karen Finerman is long MDY PUTS.



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