The Nikkei newspaper reported on Monday that Apple Inc is likely to lower iPhone and AirPods production in response to a demand slowdown caused by the Ukraine conflict and inflationary pressures.
According to the report, Apple wants to make 20% fewer iPhone SEs next quarter than expected or approximately 2 million to 3 million units. Apple has reportedly lowered AirPods orders for 2022 by more than 10 million units, according to the report.
Analysts believe that COVID-19 lockdowns in Chinese cities and a spike in inflation due to the Ukraine conflict will impact smartphone demand this year, and the report of lower demand confirms their predictions.
According to analysts, Apple is facing issues due to the lack of a design improvement for the newest iPhone SE and a $30 price rise from the 2020 model.
Ming-Chi Kuo of TF International Securities reduced his iPhone SE shipment estimate for this year from 25 million to 30 million units to between 15 million and 20 million units.
“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,” said Eddie Han of Taiwan-based Isaiah Research, who reduced his predicted sales for the model by 5 million units.
Apple is expected to release a new iPhone series later this year, but analysts believe it’s too early to predict any impact on the new lineup.