Launched on March 8, the iPhone SE would be struggling. According to the Japanese daily Nikkei, Apple has already planned to reduce the production of its new smartphone by 20% compared to its original plans. The causes would be the war in Ukraine and the rampant inflation which would have started to influence consumer demand for electronic products, according to sources from the Japanese site.
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After less than three weeks, Apple would therefore consider reducing the quarterly production of its SE by two to three million units due to weaker demand.
Note that at the same time, Ming-Chi Kuo, analyst specializing in the actions of Apple, indicated in a tweet two interesting points. The first that the latest Chinese confinements would not have an impact on the production of iPhone SE. The second that demand is weaker than expected and that it accordingly reduces its production estimates for 2022 to 15 or 20 million units, against 25 to 30 million originally. A very significant drop.
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 estimate in 2022 to 15-20M (vs. 25-30M previously).
— 郭明錤 (Ming-Chi Kuo) (@mingchikuo) March 28, 2022
Production of the iPhone 13 would also be affected, with a reduction of around two million units, but for a reason linked to seasonal demand. This reduction in ambitions would therefore not be due to the war in Ukraine. Even if the cessation of its sales in Russia, where Apple occupies the third place of smartphone sellers, could obviously have an impact on the number of products sold. The Californian giant sells about five million iPhones there a year, according to IDC.
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If the iPhone SE suffers, it may also be due to the fact that Apple seems to have kept an aging formula one year too long. The dated design, with all the technical limitations it imposes, coupled with a significant and symbolic price increase – the SE passes the 500 euro mark – make it difficult to recommend this device. It is also difficult not to look at what the competition offers for the same price or less. Apple may have finally found the limits of the attraction made by its brand, its ecosystem and its art of entry-level recycling.
Note however that, still according to Nikkei Asia, the AirPods would also be affected by a reduction in production. Apple would consider manufacturing 10 million fewer units for the whole of 2022. Information which has however been publicly denied by two Apple suppliers. Nevertheless, to get an idea of what this figure represents, the Cupertino giant produced 76.8 million last year.
On this point, even if we do not know if the Japanese daily is talking about AirPods in general, or the latest models in particular, we can fear that in the event of economic hardening, the AirPods 3 will sell less well. Indeed, although they are the least expensive of the range, they suffer a bit from the same evil as the iPhone SE, namely that they offer little for a rather high price. As much as the AirPods Pro, although released at the end of 2019, bring real added value, in particular thanks to their very good noise reduction, the AirPods 3 lack assets to justify their price in the face of competition which often does as well, or not much worse, for much less.
Source: Nikkei Asia