Apple Asks Suppliers to Make Fewer Components for AirPods, Apple Watch, MacBooks in Q1 2023 [Report]

Apple has asked several suppliers to make fewer components for AirPods, Apple Watch, and MacBooks in the first quarter of 2023, according to a new report from Nikkei. The request comes as suppliers face slumping demand and staffing chaos caused by COVID surges.

"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."

"It's very chaotic," said an executive at an electronic component maker that supplies Apple and Samsung. "The new wave of COVID surges spread super fast, and most companies found it already makes no sense to quarantine their employees."


For other companies, low demand has allowed them to ask COVID positive workers to take leave while they recover.

"More than half of our team has tested positive, and of course, we face disruptions in output," the manager of a print circuit board supplier in Jiangsu province that serves Apple and Intel told Nikkei. "But demand happened to be quite lackluster, so we just asked staff to take some leave."

Apple has faced numerous challenges in China over the past few months. Lockdowns significantly reduced production capabilities at Foxconn, leading to massive shortage of the iPhone 14 Pro during the important holiday shopping season. It looks like some of these challenges will continue into the first quarter of 2023. We'll have a better idea of how the company fared when it reports earnings at the end of January.

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