Apple is planning production cuts to an iPhone model and AirPods. Apple is scaling back production of its new budget iPhone SE due to weaker-than-expected demand, Nikkei Asia reported Monday.
The company has reportedly asked suppliers to cut production of the iPhone SE. The newly released $429 budget 5G phone, will be reduced by 2 million units from 3 million units. Which is about 20% of the initial orders, according to the publication. Apple also reduced orders for AirPods by about 10 million units for full-year 2022, according to the report.
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iPhone SE Popularity And ProductionÂ
The iPhone SE launched on March 18. While marketed as a budget product, the iPhone’s $429 price tag is still a surprising hike from the $399 model Apple launched in 2020.
Shanghai lockdown doesn't affect the iPhone SE production. However, the new iPhone SE demand is lower than expected (the delivery status "in stock" as one of the proofs), and I cut my shipment estimation in 2022 to 15-20M (vs. 25-30M previously).
— éƒæ˜ŽéŒ¤ (Ming-Chi Kuo) (@mingchikuo) March 28, 2022
The iPhone SE isn’t as popular as Apple’s more expensive iPhones. According to Counterpoint Research, the 2020 version of the iPhone SE accounted for 12% of all iPhone sales from its launch until Q4 2021.
Several major tech companies, including Apple, halted sales in Russia following its invasion of Ukraine. The U.S., EU, Japan, South Korea, and Taiwan all imposed economic sanctions on Russia for the action, disrupting the supply chain and increasing inflation risks.
Ukraine and Russia both export a high amount of nickel, platinum, rhodium, and titanium, which are critical for semiconductor manufacturing. Russia’s global exports have been limited due to sanctions from its ongoing invasion of Ukraine. Meanwhile, Ukraine is understandably having a difficult time maintaining trade while it is being invaded.
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Apple is also said to have asked suppliers to make 2 million fewer iPhone 13 handsets (across the entire range) than previously planned. However, this adjustment was explained by seasonal demand fluctuations and it isn’t related to the popularity and import of the equipment.
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