According to Nikkei Asia, Apple is reducing production of its new affordable iPhone SE due to lower-than-expected demand.
According to the journal, Apple has requested suppliers to reduce manufacturing of the iPhone SE, its new $429 affordable 5G phone, by roughly 2 million to 3 million devices, or about 20% of initial orders. According to the report, Apple also cut AirPods orders by around 10 million devices for the whole year 2022.
According to Nikkei, the drop in production is a result of the Ukraine crisis and inflation’s detrimental influence on electronics demand.
The iPhone SE isn’t as well-known as Apple’s higher-priced iPhones. According to Counterpoint Research, from its launch through Q4 2021, the 2020 edition of the iPhone SE accounted for 12% of all iPhone sales.
Following Russia’s invasion of Ukraine, several major IT companies, including Apple, ceased sales in the country. The United States, the European Union, Japan, South Korea, and Taiwan have all slapped economic sanctions on Russia as a result of the action, causing supply chain disruption and raising inflation concerns.
The report elicited no response from Apple.
Meanwhile, JPMorgan warned iPhone SE sales may be limited in China, where delivery delays have increased and store pickup is difficult due to Covid lockdowns, according to the analysts.
On March 18, the iPhone SE was released. Despite being billed as a budget phone, the iPhone’s $429 price tag is a significant increase above the $399 model Apple released in 2020.
In the fourth quarter of 2021, Apple’s smartphone market share in China reached a new high, with the iPhone maker recovering the top spot in the country for the first time in six years.
JPMorgan warned of a threat of competition from domestic businesses in China and India that are better positioned and have greater market clout. According to JPMorgan, local taxes could hamper Apple’s ability to compete in certain overseas markets.