* Contrafund owned $6.15 bln of Apple at end of December
* Fidelity's Danoff still likes Apple's cash generation
* Apple off 35 pct since hitting $705 a share
BOSTON, Jan 30(Reuters) - Portfolio manager Will Danoff, whose $85 billion Fidelity Contrafund is the largest active shareholder in Apple Inc, trimmed his holdings in the maker of the iPhone by 3.1 percent in December.
Apple remains the top holding in Contrafund, one of the best performing stock mutual funds over the past 20 years, according to the latest disclosures by Boston-based Fidelity On Wednesday.
The fact that the trimming was modest as well as Danoff's recent comments about Apple indicated he still likes the stock, which has been beaten down in recent months.
Contrafund reported holding $6.15 billion worth of Apple stock at the end of December. That translates into 11.56 million shares, compared with the 11.92 million shares reported at the end of November.
Apple accounted for 7.3 percent of Danoff's holdings, down from 8.2 percent at the end of November. Contrafund is Apple's second largest shareholder after the Vanguard Total Stock Market Index Fund.
With more competition from rival smartphone makers such as Samsung Electronic Co Ltd, Apple shares are off 35 percent since hitting an all-time high of $705.07 in late September.
Still, in a Fidelity Viewpoints interview posted Jan. 16, Danoff extolled the virtues of Apple's cash-generating power.
"Apple has been generating a billion dollars of free cash flow per week," Danoff said. "In the last two years, the company has added $100 billion of revenue without needing any additional working capital."
But Danoff also acknowledged the stock slide and stiffer competition.
"The stock has been disappointing in the last quarter or two," he said in the Fidelity Viewpoints interview. "Competition has definitely intensified in the smartphone and tablet markets."
Contrafund posted a 6.51 percent return in the fourth quarter, barely beating the 6.35 percent advance in the benchmark S&P 500 index.
Danoff got help from other technology holdings and an overweight position in gold mining companies, betting that unprecedented levels of global debt will support prices in the precious metal.
Over the past 15 years, Danoff's Contrafund has beaten 94 percent of its peers while outperforming the S&P 500 by 3.3 percentage points per year, according to Morningstar Inc.