Report: Apple Is Cutting AirPods Production Due to Increased Competition
The AirPods are a well-made pair of true wireless earbuds, and they seem to be quite popular. However, they’re not selling as well you might think, as a new report from Nikkei suggests that Apple is sitting on a lot of AirPods in its warehouses.
In fact, the report also says that Apple is planning to cut back on AirPods production by a substantial amount this year.
What’s Going On With Apple’s AirPods?
According to the report, which Nikkei says comes from multiple anonymous sources, Apple is ordering its suppliers to cut production of AirPods by 25-30 percent.
Initially, Apple was expected to produce 110 million units of AirPods, but if the report is correct, the company will make somewhere between 75 to 85 million wireless earbuds in 2021, which is a severe drop from the original estimates.
A source spoke on the situation to Nikkei:
The most significant order reduction is for the second quarter toward the start of the third quarter. The levels of inventory [in warehouses] and in-store stocks of AirPods are currently high … and demand is not as strong as expected.
While concerning, Apple is still the dominant brand in the true wireless earbuds space, even if its market share is falling rapidly. According to a report from Counterpoint released in January, Apple’s market share fell from 41 percent to 29 percent over the nine months.
The reason for Apple’s excess inventory is likely that far more brands are offering true wireless earbuds at more attractive prices than Apple. There are plenty of budget-friendly brands making decent earbuds for a fraction of the cost.
Sure, the AirPods probably sound a bit better, and they come with the Apple branding, but it’s clearly not enough to keep consumers away from choosing cheaper models. When you add in brands like Amazon releasing devices like the Echo Buds, the completion for Apple is quite steep.
Currently, Xiaomi sits behind Apple for the second best-selling true wireless earbud brand, but it holds less than half of Apple’s market share. Coming in third is Samsung, with only five percent of the market.
The Future of AirPods
Apple is definitely losing its competitive edge in the true wireless earbud space, but it’s far from the underdog. It’s still first place, and the AirPods 3 are on the horizon, which will certainly give Apple a serious boost in terms of sales.
No company can generate hype quite like Apple, and we’d expect the firm to do the same with its next-generation AirPods.
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April 28, 2021 at 07:40PM