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A New Kind of "May" Day for Apple

Monday morning started off with a bang for Apple investors, courtesy of FBR's chip analyst Craig Berger making a strange call on Apple and what seemed like a dramatic slowdown in iPhone sales.

Last I checked, short of its acquisition of PA Semi, Apple ain't a chip company.

But I digress. Berger issued a note this morning saying that Apple had slashed iPhone production for the current quarter by as much as 40 percent from last quarter. Berger bases his findings on un-named sources and channel checks, couples it all with the global, macro-economic slowdown that could cripple so many other companies, and then draws his conclusions. Which, I might add, torpedoed Apple's shares since it seems traders spent a nanosecond scanning the headlines, but failed to dig ever-so-slightly deeper.

It's Berger's conclusions that are raising the hackles, well after the story has come and gone. I wasn't going to address this today but after a load of email, I thought I'd take a stab at it, particularly a great note this afternoon from Apple watcher Andy Zaky who has been spot-on these last few months I've been reading him. (This is his what he posted today ...) He asked me to look back at Berger's track record on Apple calls when he drifts from his chip expertise into the realm of smart-phones, computers and all other things Apple.

Indeed, the first time I wrote about Craig Berger and his calls on Apple was last February when a note he released caused yet another Apple panic. It was then that Berger cut Apple production rates for iPod and iPhone by 60 percent, and MacBooks by 50 percent. I questioned then why a chip analyst was making such a call on Apple even though it cut completely against what the company had said on its earnings call just two weeks prior.

So I took a stroll down financial-memory lane today, looking at Apple's earnings covering the first part of the year. Apple sold 1.7 million iPhones in its second fiscal quarter versus the 2.3 million in its first. As for iPods?

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Apple sold 22 million in its first quarter, and 10.5 million in its second, a wider than expected slowdown, but certainly not cataclysmic by any stretch. Remember, Apple's first quarter is the calendar's holiday shopping quarter, and business always trails sequentially between its first and second quarter. That said, if you do the math, Apple's iPhone decline was only 26 percent. iPods fell by more than 50 percent (again, expected) and as for MacBooks? Sales actually increased 6.8 percent!

After those second quarter numbers came out, Berger had a chance to revisit and revise. And he did. Up.

So here we are again. More sky-is-falling predictions from an analyst trying to lay his mask of expertise over a stock and company in which he really has no expertise. We've seen this before. And yet FBR publishes it anyway. And traders trade on it. Look, as I've said before, Berger's got his sources and I certainly won't impugn his research. But we should all question it. Just as I would advise investors and traders question everything they read when it comes to taking action in a stock.

Berger says his sources and his findings suggest Apple "may" cut production. "Suggest?" "May?" Are you kidding me? Apple "may" buy Sony. It "may" triple production. It "may" do a lot of things. This is hardly something to panic about. Trouble is, when it comes to Apple, even a hint of panic can instantly become real panic. Analysts know this. They can make a name for themselves precisely because of extended coverage like this. So unfortunate for a company doing so well, and so unfortunate for investors who just can't seem to take advantage of Apple's success because of so much noise and manipulation. So unfortunate indeed.

Questions? Comments? TechCheck@cnbc.com

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