Apple is cutting production of its ultra-popular AirPods by around 25% to 40% due to a decrease in sales as a result of increased competition in the wireless earphone industry, according to a new report from Nikkei Asia.
According to the report, citing sources familiar with Apple’s production plans, the tech giant now plans to produce only roughly 75 to 85 million units of AirPods for the remainder of this year. It had initially planned to aim for 110 million units.
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 most significant order reduction is for the second quarter toward the start of the third quarter,” said one of the people familiar with the matter. “The levels of inventory [in warehouses] and in-store stocks of AirPods are currently high … and demand is not as strong as expected.”
The report does not specify which AirPods specifically will see a production cut. Apple’s current AirPods lineup includes the AirPods Pro, the second-generation standard AirPods with wireless charging, and the $550 over-ear AirPods Max. AirPods and AirPods Pro are expected to be upgraded this year, which Apple hopes will “stimulate sales,” according to the report.
Towards the end of 2020, Apple updated its entire product lineup, ranging from new iPhones, iPads, Macs, Apple Watches, and more. The AirPods, which have dominated the wireless earphone market since their debut, was one of the only Apple products not to receive an upgrade towards the end of the year.
Apple is rumored to be working on third-generation AirPods with a design similar to the AirPods Pro but lacks “Pro” features such as Active Noise Cancelation. Apple analyst Ming-Chi Kuo says that production of the new AirPods will begin in the third quarter of the year.