Tech giant Apple plans on lowering iPhone and AirPod production. This is due to a decline in demands caused by the Ukraine crisis and rising inflation. On Monday, the newspaper, Nikkei, reported on this issue, citing sources briefed on this. The report states that the Cupertino company intends to produce 20% fewer iPhone SEs in the upcoming quarter than originally planned. This would amount to about 2 million to 3 million units. Additionally, the report states that Apple has also reduced 2022 orders for AirPods by over 10 million units.
Analysts had forewarned that COVID-19 lockdowns in Chinese cities might hurt demands for smartphones in 2022. Paired with a surge in inflation due to the Ukraine conflict, a lesser demand seems inevitable. Particularly, this is true for Apple, considering the lack of a design upgrade in the latest iPhone SE along with a $30 price hike from the 2020 model. Apple did not immediately respond to a request by Reuters for comment.
On Monday, analyst Ming-Chi Kuo of TF International Securities slashed his shipment estimate for iPhone SE for the year. Kuo changed the estimate from a previous range of 25-30 million units to between 15-20 million units now.
Taiwan-based analyst Eddie Han of Isaiah Research said, “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”. Han cutting his forecast sales for the model by 5 million units.
We can expect Apple to launch a brand new lineup of iPhones later in the year. However, it is still too early for analysts to forecast any impact on the upcoming range.