Media: Apple to cut iPhone and AirPods production amid the war in Ukraine

Apple plans to reduce production volumes of iPhones and AirPods. One possible reason is the decline in demand for electronics and inflation caused by Russia’s war against Ukraine, as reported by the US magazine Reuters, citing a study by the Nikkei newspaper.

In the second quarter of 2022, Apple plans to produce 20% fewer smartphones iPhone SE — 2-3 million units less than previously planned. In addition, sources close to the company note that Apple has reduced its order of AirPods for 2022 by more than 10 million units.

This news confirms analysts’ forecasts who have warned that the COVID-19 pandemic in China and inflation caused by Russia’s war in Ukraine could hurt smartphone demand this year. Besides, they believe Apple faces challenges from the lack of a design upgrade for the latest SE and a $30 increase in its price from the 2020 model.

“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 said, cutting his forecast sales for the model by 5 million units.

Apple has also asked suppliers to make a couple of million fewer units of the entire iPhone 13 model range. However, this adjustment was based on seasonal demand, say sources familiar with the matter.

According to Nikkei, such steps may also reflect growing pressure on global suppliers of chips, components, and the technology industry following the Russian invasion of Ukraine, which has compounded the years-long chip shortage and affected a range of industries.

As per experts, if Apple’s moves to cut production are confirmed, it could spark a chain effect on other electronics manufacturers. At the same time, Apple itself has not responded to such news in the media. The company is expected to release a new line of iPhones in late 2022.