Apple’s latest earnings report found the hardware giant exceeding expectations amid the ongoing chip shortage. All told, the company marked a 9% growth in iPhone sales, as most of the rest of the market contracted. When it comes to navigating the supply chain, there’s a lot to be said for the leverage that comes with being one of the biggest players.
But not even a giant like Apple is immune from the impact of global affairs. In the early days of the pandemic, the company declined to offer guidance, due to uncertainties. Probably the right move – given the way things have been going in the world over the past two years. And now, the latest iPhone SE is arriving to a kind of perfect storm of global issues.
Citing conversations with sources close to the matter, Nikkei Asia is reporting that Apple is cutting production on the budget handset by 20%. Observers were, no doubt, expecting some reduction, courtesy of the one-two punch of the Ukraine invasion and inflation, but the size of the figure comes as a surprise for a brand new handset – and the first addition to the series since 2020. The drop amounts to somewhere between 2-3 million handsets for the quarter.
At the beginning of the month, Apple announced that it would be halting sales in Russia, following its invasion of neighboring Ukraine. “We will continue to evaluate the situation and are in communication with relevant governments on the actions we are taking,” the company noted at the time. “We join all those around the world who are calling for peace.”
A number of other key consumer hardware companies have taken similar action, including Apple’s chief competitor, Samsung. Both brands have routinely ranked in the top five smartphone market share in the country.
The global chip shortage continues to be a factor here, as well, along with broader inflation issues, which have impacted purchasing decisions. These sorts of financial concerns invariably play a role in sales numbers for products like smartphones, which are sometimes categorized as non-essential purchases. At the very least, it has the effect of causing users to hang onto older devices a bit longer than they might otherwise have.
Along with the impact on the SE, the publication notes that orders for AirPods have also been dramatically scaled by around 10 million for the whole of 2022. A reduction in iPhone 13 production, meanwhile, is reportedly largely the result of seasonal demand fluctuations.
TechCrunch has reached out to Apple for comment.