Apple shares fall on production-cut rumour

APPLE SHARES LOST seven per cent of their value yesterday after rumours started to pop up that the entertainment gear maker was planning to cut production of its iPhoney and eyePod.

According to Forbes, Citigroup analyst Richard Gardner said that nobody should be surprised that Apple is cutting back production. The company often needs to clear inventory ahead of new product launches, which he expects in the next two months. However such comments did confirm in people's minds that a cut back in production was expected.

Paul Foster, options strategist at Web information site theflyonthewall.com told Reuters that there was lots of unconfirmed speculation that Apple was planning to cut back on production of either the eyePod or the iPhoney. The rumour was not particularly firm on which was for the chop.

Since Apple shares are 60 per cent higher since the iPhoney was released, punters are really sensitive to a whiff of bad news.

Shaw Wu, an analyst with American Technology Research said there were a lot of rumours about Apple which mostly end up being wrong or short-term.

Of course the people that could confirm if they are cutting back production, Apple is refusing to comment, a PR stance which gives the media the right to make stuff up. µ