In the third quarter of Apple's fiscal year 2018, its wearables and other products such as the AirPods saw a commercial success with 60% year-over-year growth. Three years later, the earbuds' market standing seems to be taking a hit from growing competition.
A new report from Nikkei Asia claims Apple is planning on trimming the AirPods production this year amid declining sales. From the initial target of 110 million units, the tech giant will reportedly release between 75 million and 85 million AirPods for 2021. That's equivalent to a production cut of around 25% to 30% due in large part to an increase in competition in the wireless earbuds market.
Apple is expected to significantly lower its order for AirPods starting in the second quarter until the start of the third quarter. At the moment, the company isn't seeing high consumer demand for the product while its warehouse and in-store inventory is at a high level.
Late last year, analyst Ming-Chi Kuo predicted that AirPods shipments could stay flat or even drop up to ten percent in the first half of 2021 amid lower than expected demand. The analyst cited some manufacturing roadblocks and the absence of an AirPods successor last year as the driving factor for that decline.
That said, Apple may finally launch the third generation AirPods this year. It remains to be seen, though, how the upcoming earbuds will spark sales growth for the product line again.