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Slow sales force Apple to cut iPod, iPhone production

With fewer sales widely expected in 2008, Apple is aggressively cutting back production on its iPod and iPhone after a slowdown in sales. However, the renowned company is increasing annual production on its Mac computers.

According to FBR Research, the Q1 cuts may be as a result of fewer-than-expected sales in 2008. Apple will reduce orders for iPhones and iPods for the second time in two months.

Another possibility could be from the recently announced 32-gigabyte iPod Touch. It seems that the iPod Touch may have seen the weakest sales as production orders have fallen the most. The device may suffer from being less than an iPhone, since it has no phone capabilities and relies on Wi-Fi for connectivity, so users who aren’t in range of a Wi-Fi connection simply can’t get online.

MacBook chip orders are also down 50 percent compared to last year, but iMac orders are up 35 percent.

Apple is also making a new 3G version of its iPhone and that too could be a reason why the company is scaling back. AT&T, Apple’s exclusive carrier for the iPhone in the US, announced it is building out its 3G network to more locations nationwide.

Meanwhile, Net Applications released new numbers on its operating system statistics, which revealed that Macs accounted for the largest percentage of Internet traffic ever, 7.57 percent. iPhone-based traffic nudged up from 0.12 percent in December to 0.13 percent in January. More importantly, Net Applications’ numbers show that iPhone traffic is coming from many more countries than have official wireless carriers for the phones.