Apple Said to Cut iPhone, AirPods Output Due to Weaker-Than-Expected Demand

Apple is planning to cut the output of its iPhone and AirPods devices as the Ukraine crisis and looming inflation start to weigh on demand for consumer electronics, the Nikkei reported on Monday, citing sources.

The company plans to make about 20 percent fewer iPhone SEs next quarter, or lower production orders by about 2 million to 3 million units than originally planned, due to weaker-than-expected demand, Nikkei said.

The US tech giant also reduced orders for its AirPods wireless headphones by more than 10 million units for all of 2022, as it scales back the level of inventories due to lukewarm demand, the newspaper said.

Earlier this month, Apple unveiled 5G connectivity to its iPhone SE, its low-cost model aimed mostly at buyers in emerging markets.

Counterpoint Research said the earlier 4G iPhone SE accounted for 12 percent of total iPhone sales from its launch in the second quarter of 2020 until the end of 2021, with Japan being the biggest market after the United States.

The company also asked suppliers to make a couple of million fewer units of the entire iPhone 13 range than previously planned, but said this adjustment was based on seasonal demand, according to the report.

Apple did not immediately respond to a Reuters request for comment.

© Thomson Reuters 2022