Apple feels iPhone SE 3 won’t do well, reportedly cuts production by 20 percent

Published On: March 30, 2022

Highlights

Apple cuts iPhone SE 3 production by two to three million units for Q2 2022
iPhone 13 series production has been asked to be cut by 1-2 million
Apple has slashed production of AirPods by 10 million units for 2022

Apple refreshed the iPhone SE earlier this month with a new processor, 5G connectivity but the same old design. However, days after its launch, a new report has emerged claiming that Apple is already slashing iPhone SE 3 production. As reported by Nikkei Asia, Apple is cutting down the iPhone SE 3 production by two to three million units for the coming quarter owing to “weaker-than-expected demand,” meaning the company intends to make about 20 percent fewer iPhone SE 3 units than originally planned.

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The ongoing Russia-Ukraine war and looming inflation are to blame, says the “sources briefed on the matter”. Renowned Apple analyst Ming-Chi Kuo corroborates the report saying that the iPhone SE 3 demand is lower than expected. He also reduced his shipment estimations for the iPhone SE 3 from 25 to 30 million to around 15 to 20 million units for 2022.

“The war has affected spending at the European markets. It is understandable [consumers will] save the money for food and heating, ” said an executive at an Apple supplier to Nikkei Asia.

Apple has also cut the production for the iPhone 13 not because of low demand but due to seasonal demand change. The Cupertino giant has asked suppliers to make a “couple of million fewer units” of the iPhone 13 series.

“We see the end demand for smartphones in China is quite weak. … In addition, the Russia-Ukraine war will likely have spillover effects to the whole European market and on consumer demand,” adds Brady Wang, a tech analyst with Counterpoint Research.

The iPhones are not the only category expecting a lower demand. Apple has even cut the AirPods production by more than 10 million units for the rest of 2022. The Cupertino giant predicts a lukewarm demand for the earphones and doesn’t want to waste its inventory. Last year, Apple shipped about 76.8 million units of AirPods. However, we can expect the overall shipment to go down this year with the lower production.