Apple is telling its suppliers to cut the number of production for iPhones and AirPods next quarter due to lower demand, according to Nikkei. The reduced demand is apparently caused by the rising prices in energy due to the conflict in Ukraine, causing inflation in consumers’ cost of living.
Multiple suppliers are reportedly being told to cut the production of the third-generation iPhone SE with 5G, launched only a few weeks ago, by about two to three million units for the upcoming quarter because of weaker-than-expected demand. Additionally, AirPods production is being reduced by 10 million units for the rest of 2022.
Even the popular iPhone 13 lineup is being affected as Apple is also instructing suppliers to produce a few million units fewer than planned, but will be adjusted based on seasonal demand. The global supply chain issue has also been worsened by the conflict in eastern Europe, with rapidly increasing costs for oil, energy, and raw materials.
An executive at an Apple supplier told Nikkei that the war has affected spending in European markets, causing consumers to save money for food and heating. Apple also stopped selling products in Russia, further affecting demands for the iPhone where the tech giant held a 16% market share in the country last year.