Apple to cut AirPods production by up to 30% in 2021, says report

“Apple now expects to make between 75 million and 85 million units for 2021, compared with a previous production forecast of 110 million units.”

What you need to know

  • Apple is reportedly cutting production of AirPods by up to 30% in 2021.
  • That’s because sales are reportedly losing steam as competition intensifies.
  • A new report says Apple will make 75-85 million units this year, compared to a previous forecast of 110 million.

A new report says Apple plans to cut production of its AirPods by between 25% and 30% as sales lose steam.

From Nikkei Asia:

Apple is trimming its planned production of AirPods wireless earphones by 25% to 30% this year as intensifying competition dents sales of the U.S. tech giant’s fastest-growing product line, sources briefed on the matter told Nikkei Asia.

Apple now expects to make between 75 million and 85 million units for 2021, compared with a previous production forecast of 110 million units.

The report says the move indicates “demand is weakening for AirPods” following 5 years of double-digit growth.

The report says the “most significant order reduction” is for the second quarter and towards the start of the third quarter, with levels of inventory as well as in-store stocks currently high. Furthermore, a source said, “demand is not as strong as expected”. The report notes some retailers globally offering discounts:

The retail price of AirPods Pro on T-Mall, one of the leading Chinese e-commerce platforms, is 1,498 yuan ($231), a 25% discount compared with its original price tag of 1,999 yuan.

The report does however offer some hope, as rumored new AirPods could drive sales:

The U.S. tech giant hopes that new AirPods slated to be introduced this year will stimulate sales, the people said.

The report says Apple has “played a major role in cultivating the market for true wireless earphones” but is now chafing under the success of some of its competitors, with Apple’s market share falling from 60% in 2018 to just 31% last year, according to Counterpoint Research.

Apple’s new AirPods, expected later this year as mentioned could debut a design reminiscent of Apple’s AirPods Pro, currently the best true wireless earbuds on the market, without active noise-canceling technology.

The news could raise the eyebrows of investors ahead of Apple’s Q2 2021 earnings call, scheduled to take place later on Wednesday.

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