Apple to cut production of iPhones and AirPods, Nikkei reports

March 28 (Reuters) – Apple Inc (AAPL.O) It plans to cut iPhone and AirPod production due to slowing demand caused by the Ukraine crisis and high inflation, the Nikkei newspaper reported Monday, citing sources familiar with the matter.

The report said the company plans to produce 20% less iPhone SEs – or about 2 to 3 million units – in the next quarter than originally planned. She added that Apple also reduced orders for 2022 for AirPods by more than 10 million units.

Apple, whose shares fell about 2% in pre-market trading, did not immediately respond to a Reuters request for comment.

The news of weak demand mirrors the expectations of analysts who have warned that the COVID-19 shutdown in Chinese cities and rising inflation due to the conflict in Ukraine could hurt smartphone demand this year.

Analysts said Apple, in particular, is facing challenges from a lack of a design upgrade for the latest SE and a $30 price increase over the 2020 model.

Ming-Chi Kuo of TF International Securities on Monday lowered its shipment estimate for the iPhone SE this year to between 15 million and 20 million units, from 25 million to 30 million previously.

“It looks very similar to the iPhone SE (2020), a second revamp of the iPhone 8, and is unlikely to spark consumer demand,” said Eddie Han, an analyst at Isaiah Research in Taiwan, lowering his expected sales for the model. 5 million units.

Apple is expected to release a new lineup of iPhones later this year, but analysts say it’s too early to predict any impact on the upcoming range.

Additional reporting by Janavi Nidomulu and Nivedita Balu in Bengaluru; Editing by Anil de Silva and Aditya Soni

Our criteria: Thomson Reuters Trust Principles.