Apple is planning to lower iPhone and AirPod production due to a demand slowdown caused by the Ukraine crisis and rising inflation, the Nikkei newspaper news report said.
The company plans to produce 20 percent fewer iPhone SEs – or about 2 million to 3 million units – next quarter than originally planned. Apple has also reduced 2022 orders for AirPods by more than 10 million units.
Apple’s revenue from iPhones touched $71.628 billion during the December quarter of 2021 as against $65.597 billion in the same quarter previous year.
Apple faces challenges from the lack of a design upgrade for the latest SE and a $30 increase in its price from the 2020 model, analysts have said.
Ming-Chi Kuo at TF International Securities slashed his shipment estimate for iPhone SE this year to between 15 million and 20 million units, from 25 million to 30 million units previously.
“It looks very similar to the iPhone SE (2020), a second refurbishment of the iPhone 8, and it is even less likely to arouse consumer demand,” Taiwan-based Isaiah Research analyst Eddie Han said, cutting his forecast sales for the model by 5 million units.
The latest iPhone SE, which has a $429 price tag, is expected to do well, with 5G network support now bringing it in-line with key competitors across the mid-end segment, according to a report from Counterpoint Research on March 9.
The report said Apple’s 4G iPhone SE 2020 accounted for 12 percent of Apple’s total iPhone unit sales from its launch in Q2 2020 to Q4 2021 – with Japan and US the biggest markets for the device globally.
Apple is expected to launch a brand new iPhone lineup later this year, but analysts say it was too early to forecast any impact on the upcoming range.