Apple will cut production of iPhones and AirPods as economic pressures from the Ukraine crisis are expected to hit consumer demand, a report says

• The tech giant will make 20% fewer iPhone SEs next quarter due to an expected drop in demand.
• The company will also make about 10 million fewer AirPods this year.

Apple is to cut production of AirPods and its iPhone SE model due to expectations that inflation will result in lower demand, Nikkei reported on Monday.

The tech giant has told suppliers it intends to reduce production orders for its iPhone SE model by about 20% from what it had previously planned – a cut of about 2 to 3 million units – in the next quarter, sources told the outlet, and it has reduced orders for its AirPods by more than 10 million units in 2022, Nikkei reported.

The outlet said that economic pressures stemming from the Russian invasion of Ukraine, and the international response to it, has prompted the move. Sanctions against Russia have not only crippled the country's own economy, but also rocked the global supply of some commodities, creating volatility in energy and grains markets. With an acceleration in inflation expected as a result, consumer demand in the tech industry in particular stands to be curbed, Nikkei reported.

"The war has affected spending at the European markets. ... It is understandable [consumers will] save the money for food and for heating," an executive at an Apple supplier told Nikkei.

Apple launched its new 5G-capable iPhone SE on March 8, marketing it as its "most affordable iPhone", according to a release on its website.

According to Counterpoint Research, which Nikkei cited, Apple shipped 76.8 million AirPods units in 2021, but that figure will likely decline in 2021, Nikkei reported, citing people familiar with the situation.

The company will also be ordering fewer units of its entire iPhone 13 line, but that was put down to seasonal demand, per the outlet.

Apple did not immediately respond to Insider's request for comment. Apple declined to comment to Nikkei, it reported.

Apple stopped all product sales in Russia and removed state news apps RT and Sputnik News from its App Store outside of the country shortly after Russia's invasion of Ukraine. It is the third-largest smartphone brand there, according to Nikkei. The company had also limited Apple Pay and disabled live incidents and traffic status from Apple Maps in Ukraine to protect Ukrainians.