Apple falls below $US400 after comments the company would cut iphone production APPLE shares have briefly fallen below $400 after an analyst said the iconic gadget maker is to slash production of its iPhones. Shares fell as low as $US398, before closing at $US402.34, a drop of 2.7 per cent. Apple has been on a downward trend since last September when shares topped $US700. A research note from the brokerage firm Jefferies said Apple is likely to cut production plans for the iPhone to between 25 and 30 million in the third quarter, down from between 40 to 45 million. It went on to predict that Apple would also trim production in the fourth quarter to between 50 and 55 million from 60 to 65 million. "Our survey of several hundred Orange, Vodafone, and EE stores in the UK indicates that inventories are elevated for iPhones and the Samsung Galaxy 3," said Peter Misek at Jefferies. Misek added that "memory module makers have recently been reallocating orders in the third quarter away from Apple and toward emerging market players." The analyst said production of a new iPhone has not commenced yet "but we believe it is about to begin," adding that he expects a new "iPhone 5S" updating the current model and a "low-cost iPhone" to launch in September. A separate note from Trip Chowdhry at Global Equities Research said the lower share price and eroding market share are creating a vicious circle for Apple, prompting some employees to jump ship.