In a sign of the gloomy outlook for consumer electronics, Apple has notified several suppliers to build fewer components for AirPods, the Apple Watch and MacBooks for the first quarter, citing weakening demand, according to Nikkei Asia’s supply chain checks with several component suppliers.
In Apple’s most recent reportable quarter (fiscal Q4 2022), Mac revenue was $11.51 billion, an increase of nearly 26% year-over-year. Wearable revenue, which includes the Apple Watch, came in at $41 billion, while iPad revenue dropped by 13% year-over-year to $7.17 billion.
“Apple has alerted us to lower orders for almost all product lines actually since the quarter ending December, partly because the demand is not that strong,” a manager at an Apple supplier told Nikkei Asia. “The supply chain in China is still trying to cope with the latest abrupt policy turns, which brought a shortage of laborers because of the sharp COVID surges.”
The report comes as Apple’s largest iPhone plant is close to resuming peak production capacity, following weeks of limited production.
Foxconn, Apple’s largest supplier, is at 90% of its peak capacity at its main iPhone plant in the Chinese city of Zhengzhou. The plant is currently operating with 200,000 staff, Foxconn executive Vic Wang told the publication.