Apple To Cut iPhone Production – Report

Inflation pressures, coupled with the Ukraine invasion have been blamed as Apple plans to lower production of iPhone SE and AirPods in 2022

Apple is planning to lower iPhone and AirPod production, as consumer demand apparently slows due to the Ukraine crisis and rising inflation.

This is according to a report in Nikkei Asia on Monday, which cited sources briefed on the matter.

It reported that Apple plans to make about 20 percent fewer iPhone SEs next quarter than originally planned, thought to be equal to 2 to 3 million fewer entry-level handsets.

Weaker demand

Apple has also apparently reduced 2022 orders for AirPods by more than 10 million units.

The report, if confirmed by Apple, mirrors analyst forecasts who warned the Covid-19 lockdowns in Chinese cities, coupled with a surge in inflation around the world due to Russia’s invasion of Ukraine, could hurt smartphone demand in 2022.

Apple, in particular, 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 were reported by Reuters as saying.

Reuters cited Ming-Chi Kuo at TF International Securities on Monday, who 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 was quoted as saying, cutting his forecast sales for the model by 5 million units.

Old design

At its ‘Peek Performance’ launch event on 8 March, Apple revealed its third generation iPhone SE, boasting a number of modest improvements.

The updated low-cost iPhone SE line included 5G capabilities, and the A15 Bionic chipset, which is also found in the iPhone 13 series.

It stuck with the classic iPhone 8 design (with a home button), which Apple marketeers have labelled an “iconic design”.

Apple also raised the price by $30 of its entry-level smartphone from $399 (£389) for the 2020 64GB version, to $429 (£419) for the 2022 64GB handset.