According to people familiar with the situation who spoke to Nikkei Asia, inflation and the Russian invasion of Ukraine have caused a 20 percent drop in expected production for the low-cost handset.
Two-to-three million handsets have been lost in the first quarter, according to the sources, which is particularly shocking considering that the phone was released only a few weeks ago.
Following Russia’s invasion of Ukraine, Apple had previously stated that it would cease all sales in Russia. As one of the top five smartphone brands in Russia, Apple’s production of the iPhone SE is expected to be hampered as a result of the current political climate in the country.
The global chip shortage continues to affect a number of industries and has been exacerbated by inflationary pressures brought on by the low supply of semiconductors and the pandemic.
The lower end of the market is already feeling the effects of companies like Qualcomm struggling to keep up with demand. Apple appears to be experiencing a similar issue with the production of the iPhone SE right now.
Another product affected by the issue is the AirPods, whose production has been reduced “significantly” to around 10 million units in total for the year 2022. There have been rumours that production of the iPhone 13 will be reduced, but this is being attributed to seasonal fluctuations in demand.
There is speculation that Apple has taken its first real blow from the chip shortage. Sales of the iPhone have increased 9 percent year over year, according to the company’s most recent earnings report, and this growth has been sustained.