Image Credits: iGeekBlog
While premium gadgets such as the PS5 and graphics cards continue to sell out, demand for less difficult-to-manufacture cheaper goods may be lower.
According to Nikkei Asia, Apple will produce 20% fewer iPhone SEs in the next quarter than previously expected, as well as 10 million fewer AirPods in total for 2022.
In his letter, noted analyst Ming-Chi Kuo revealed precise estimates on SE demand, indicating that he expects Apple will ship 15 to 20 million SEs in 2022, up from his earlier forecast of 25-30 million (a 22 to 66 percent decline for the year).
Production to get down by 20 percent for iPhone SE
According to the sources, Apple is cancelling its manufacturing plans due to supply chain concerns or chip shortages, which have plagued most of the electronics sector. Instead, they point to lower-than-expected demand for Apple’s next low-cost smartphone.
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 estimation in 2022 to 15-20M (vs. 25-30M previously).
— éƒæ˜ŽéŒ¤ (Ming-Chi Kuo) (@mingchikuo) March 28, 2022
There are several things that might cause customers to lose interest in the iPhone SE. The Nikkei cites concerns over the Ukraine crisis and inflation, while CNBC highlights COVID lockdowns in China, which make it physically difficult for consumers there to purchase a new phone.
Furthermore, speaking from my experience, folks who purchase iPhone SEs aren’t generally the kind to rush out and upgrade as soon as a new model becomes available. They may also be less inclined to do so when petrol prices range from $4 to $6 per gallon.
The phone itself is also more expensive – the new model SE costs $30 more than the previous edition, ostensibly due to 5G.
This reduces the price difference between it and, for example, an iPhone 12 or 13 Mini (and the Mini lineup is already what the iPhone SE should be).
Of course, the Mini is substantially more expensive at retail, but the monthly charges tell a different tale. The SE costs $11.94 a month on Verizon for the 64GB model. A 64GB iPhone 12 Mini costs $16.66 a month, while a 128GB iPhone 13 Mini costs $19.44 per month.
That price difference will matter to some, but plenty of people will undoubtedly think, “What the heck, it’s just $5 more per month.” Furthermore, more budget-conscious customers may observe the higher price and opt to continue with what they have for a few more months.
All of this is to suggest that the new SE is not inherently a flop. Still, a 20% decrease in manufacturing might help establish the benchmark for the SE’s sales across the phone’s (presumably multi-year) lifespan.
And, while it’s too early to say what this may imply for future generations of the SE, I’m sure Apple is already debating it – if I’m being optimistic, perhaps a tepid reaction would lead the firm to pursue a Mini / Max strategy for the next SE.
