The subprime mortgage crisis is taking its toll on the ever-popular iPod. Apple is anticipating slower sales this year and has asked its suppliers to slow down iPod production. The information comes from the Banc of America. Production cuts are expected to be between 10% and 20% compared to early January and 30% compared to December. “Current production expectations for March imply a 5–10% year-over-year unit decline, versus our expectation for 5% year-over-year unit sales growth during the March quarter, likely implying a continuing inventory rightsizing and sales sluggishness,” says analyst Scott Craig.

As for the iPhone, there have been concerns that the lukewarm acceptance in Europe will result into a cut back in production. Mr. Craig:

“[Still], we remain concerned that iPhone production and demand are lackluster,” he explained. “After several data-points in December and early January indicated large production cuts of 50%+ to iPhone production for the March quarter, our recent checks reveal that production levels are 40–55% higher for [the first calendar quarter of 2008], than the recent cuts originally suggested, although still down significantly from two months ago.”

It appears that everything depends on another iPhone hype this year, this one on an iPhone with 3G connectivity.

[sources: gmp3, appleinsider]