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Apple is reportedly reducing iPhone SE production by 20 percent; set to pay more fine in the Netherlands

Less than a month after Apple’s Peek Performance event, where it announced the new iPhone SE, the company is reportedly cutting production by about 20 percent.

It seems the hype of a new release is not sufficient to maintain the sales of the iPhone SE, as Apple has reportedly moved to reduce the production target by 20 percent in the next quarter. The model may be budget-friendly, but it doesn’t mean it is flying off the shelf.

According to the report from Nikkei Asia, the Cupertino giant will also cut AirPod production for 2022 by 10 million units.

Apple analyst Ming-Chi Kuo has previously stated that he expects the company to produce between 15 and 20 million units of the SE in 2022 instead of his earlier estimate of between 25 and 30 million. This translates to a reduction of between 22 and 60 percent.

Surprisingly, the reports of the reduction have not linked to chip shortages or other supply chain issues, which have affected the global industry. The reason has been less than expected demand for the cheap iPhone.

However, there are multiple reasons why demand may be flat. These include the current war in Ukraine and the attendant inflation. Or, as CNBC claims, Covid lockdowns are returning in some parts of China. They have made it harder for customers to get the new phones at the store physically.

Moreover, the target market for the iPhone SE may not rush to buy the phone because Apple has released another slight update. The rising costs of fuel might even dissuade them.

In addition, the new SE costs more than the previous generation, most likely due to the addition of a 5G modem. The $30 difference may mean much to budget phone buyers. It also means the difference in price between the SE and the iPhone 12 Mini, for instance, has contracted.

The difference between the iPhone SE and the iPhone 12 Mini prices becomes less significant when you consider how much buyers pay on the monthly plan. Verizon offers the SE for $11.94 per month for the 64 GB version, but you can get the 64 GB iPhone for just $16.66 per month. Even the 128 GB iPhone 13 Mini could be got for $19.44 per month.

These differences may matter to some budget phone buyers, but they can motivate others to get better-specced iPhones.

Meanwhile, Apple cutting the SE production does not mean the phone is a failure or is not moving units sufficiently. Apple sells phones in large volumes, and 20 percent less is still a lot of phones, which some other phone makers would be jealous of.

However, it is too early to predict what this may mean for the model long time, although Apple executives are most likely taking the dip seriously.

Meanwhile, Apple has been slammed with its 10th fine in the Netherlands for failing to comply with the order to allow dating apps to use third-party payment processing methods. The fines now look set to increase as the ACM, the Dutch compliance agency, is to determine if Apple’s latest proposal satisfies all the conditions imposed on it.

The body released the statement below without mentioning what the proposal contains:

“On Sunday, March 27, Apple adjusted its proposal concerning compliance with the requirements set by the Netherlands Authority for Consumers and Markets (ACM) under Dutch and European competition rules. ACM welcomes Apple’s current step. The adjusted proposal should result in definitive conditions for dating-app providers that wish to use the App Store. Once the proposal for definitive conditions has been received, ACM will submit it to market participants for consultation. ACM will then as soon as possible hand down its decision whether Apple, when implementing those definitive conditions, is in compliance with ACM’s requirement that alternative methods of payment should be possible in dating apps.

“Until last weekend, Apple still had not met ACM’s requirements. That is why it has to pay a tenth penalty payment, which means that Apple must pay the maximum penalty of 50 million euros. If ACM comes to the conclusion that Apple does not meet the requirements, ACM may impose another order subject to periodic penalty payments (with possibly higher penalties this time around) in order to stimulate Apple to comply with the order.”

Written by HackerVibes

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