Production of the iPhone (which includes the iPhone 4S, the iPhone 5 and the unreleased iPhone 5S) for the last six months of the year will now be between 90 million and 100 million rather than 115 million to 120 million, Blair said.
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The company is not expected to reduce iPad production, however, he said.
As for the speculated low-cost iPhone, Blair said his firm believes the device will be targeted at a possible deal with China Mobile.
"We anticipate this handset will launch in CYQ4 and believe initial production for the China Mobile model to be in the 10 million unit range for the first 30-60 days of TD-SCDMA production. China mobile currently has 730 million subscribers and represents the single biggest untapped carrier opportunity for Apple," he said in his note.
Apple's share price was down almost 1 percent during morning trading on Monday.
—By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson