Nikkei drops an Apple earnings day stink bomb

Right on schedule.

From Nikkei Asia's "Apple trims AirPods production plans as sales lose steam" posted Wednesday: 

Apple is trimming its planned production of AirPods wireless earphones by 25% to 30% this year as intensifying competition dents sales of the U.S. tech giant's fastest-growing product line, sources briefed on the matter told Nikkei Asia.

Apple now expects to make between 75 million and 85 million units for 2021, compared with a previous production forecast of 110 million units.

The downward revision indicates that demand is weakening for AirPods, whose shipments have been growing by double-digit percentages since their introduction in 2016.

My take: I wouldn't be surprised. AirPods were on most every American teenager's wishlist last Christmas, and according to the latest teen survey, they got their wishes. I should add, however, that Jonny Evans at Apple Must offers a plausible alternative to Nikkei's theory of weakening demand:

Apple cuts AirPod production as it preps product refresh

See also: What to do with a problem like Nikkei Asian Review?

33 Comments

  1. Fred Stein said:
    AirTags will take up the slack, IF demand for AirPods tapers.

    8
    April 28, 2021
  2. bas flik said:
    airpod is in essence a hype product. i don not know if people can sustain wearing these things over decades. to me looks fashion. one day they will disappear. like before with the bluetooth headsets. it started in 2000. after 10-15 years they completely disappeared. until apple came with airpods and it all started over again. we buy “airpods” in china for 3 dollar.
    so apple should upgrade the airpod as a medical device for hearing loss and tinnitus masker. this will increase price and insurance companies will pay for it.

    7
    April 28, 2021
    • Gregg Thurman said:
      tinnitus masker

      Oh, how I want one (set).

      4
      April 28, 2021
      • Norman Lotz said:
        For me, hearing aids do the job nicely.

        2
        April 28, 2021
    • Bart Yee said:
      @bas In my experience, the non-Apple Chinese copies are just so much junk comparatively. Sure, there’s a decent market worldwide for cheap(er) AirPod copies despite everyone initially saying AirPods were ugly, stand out too much, fall out, battery life, etc. etc., but guess what is the most copied wireless earbud wearables? Everyone decries Apple products and pricing but everyone who wants to make a buck copying coattails on Apple designs, form factors, and appearance. Witness all the fake, copycat Apple Watch wannabes on Amazon, same with AirPods.

      As for a fad, maybe so, but a fairly long lived and profitable “fad” for Apple and shareholders. And wouldn’t most businesses love to be able to sell high demand profitable products to a young (and older) demographic who want and will gladly pay for said products with great fervor and regularity? If it works for them, Apple wants to be that supplier and product purveyor.

      1
      April 28, 2021
    • John Konopka said:
      I don’t see that AirPods are simply hype. They work really well and are very useful. There may be an aspect of popularity to them, but fundamentally they are really good.

      2
      April 28, 2021
  3. Gregg Thurman said:
    There three possibilities here.

    The first is that production is being cut due to slowing demand. I don’t like this hypothesis because Apple is so good at forecasting demand.

    The second is that Apple is clearing inventory ahead of a new model introduction. See above.

    The third is the very real possibility that Nikkei is making this shit up. Given Nikkei’s track record this is my personal favorite.

    8
    April 28, 2021
    • Jerry Doyle said:
      @Gregg Thurman: “…. that Nikkei is making this shit up.”

      Ha! Just loved that! My second deep chuckle for the day & it’s still morning.

      4
      April 28, 2021
  4. Dave Ryder said:
    You really can’t draw conclusions from these stories of production cuts.

    5
    April 28, 2021
    • David Emery said:
      Actually, you can draw conclusions about “these stories of production cuts.” They provide very little actual documented insight into Apple’s sales or financial figures. And the media, by continuing to promulgate stories that just haven’t proven out, are guilty of at best incompetence.

      8
      April 28, 2021
      • Bart Yee said:
        @David Yup, just as Tim Cook has been trying to warn and tell everyone repeatedly.

        1
        April 28, 2021
  5. bas flik said:
    also in the Nikkei 27-4-2021:
    https://asia.nikkei.com/Business/Tech/Semiconductors/Apple-s-follow-up-to-M1-chip-goes-into-mass-production-for-Mac

    TAIPEI — The next generation of Mac processors designed by Apple entered mass production this month, sources familiar with the matter told Nikkei Asia, bringing the U.S. tech giant one step closer to its goal of replacing Intel-designed central processing units with its own.

    Shipments of the new chipset — tentatively known as the M2, after Apple’s current M1 processor — could begin as early as July for use in MacBooks that are scheduled to go on sale in the second half of this year, the people said. Sources said it will eventually be used in other Mac and Apple devices beyond the MacBook.

    4
    April 28, 2021
  6. Daniel Epstein said:
    Well my feeling is that there is always some Truth in these production cut stories but they are written and interpreted to draw clicks and attention more than for providing useful investment info. If Apple reports good numbers this afternoon and optimism for the next quarter will we care what the Nikkei got right or wrong on this subject? Somehow they hardly are ever correct on the overall health of Apple the company.

    5
    April 28, 2021
  7. David Drinkwater said:
    My take: it is imperative to throw some shade on Apple on Earnings Day so that, after the fact, you can say, “see how my observation on Apple impacted their performance after Earnings Day?”.

    Just like there is no real buyback blackout window, there needs to be a shade wind around Earnings Day. But that might interfere with freedom of the press.

    Present company is, of course, excluded.

    4
    April 28, 2021
  8. bas flik said:
    sentiment is little depressed because of msft which dropped results equilly aapl will do. they are down but still hovering record level. so apple should as well go into record direction minus 2-3%. is low 140.

    1
    April 28, 2021
  9. bas flik said:
    given all chip shortages real surprises are impossible. so 150 is out of reach this time.

    2
    April 28, 2021
  10. bas flik said:
    though given results shopify and google maybe services can give a big surprise and propel AAPL to 150.

    2
    April 28, 2021
  11. My Dad (92 year old B29 pilot) wants Apple to remove the requirement for an iPhone. ‘Make ‘em into real hearing aids, Apple!’ he declares. ´Loves all my various pods.’ He’ll only use Mom’s flip phone. When your hands barely work touch screens become ineffective…

    3
    April 28, 2021
    • Bart Yee said:
      If Siri were as attentive and accurate as we really need her/it to be, you/he could almost use an iPhone without fingers. Put a Watch on your dad to unlock at any time or never lock the phone and who knows. iPhone accessibility setting might help some. Just a suggestion.

      0
      April 28, 2021
  12. bas flik said:
    Thomas. amazing your father is a b29 pilot. as a kid i made a scale model of the b29 with many moving parts. since then i really love this plane.

    2
    April 28, 2021
  13. bas flik said:
    with these impressive numbers 150 is possible. trailing eps 4,4 x 33-35. i go check my champagne.

    2
    April 28, 2021
    • Bart Yee said:
      Everyone should have a celebratory toast today/tonight/tomorrow for Apple’s continued success, and every long AAPL shareholders’ good fortune to be invested in such a strong and well run company.

      I’ll be saying “Cheers!!” to Tim, Luca, Jeff and the entire Apple management, board, and employees around the world. Hat’s off and thanks for such a stellar quarter on the heels of an astounding Q1. 2021 is going to be Super Speciale, an homage to my vintage bicycle!!

      0
      April 28, 2021

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