Apple’s plan to ramp up AirPods production could be delayed due to the coronavirus outbreak. Nikkei Asian Review reports today that Apple’s three primary AirPods manufacturers, Luxshare, Goertek, and Inventec, have all halted AirPods production.
The coronavirus outbreak has forced suppliers in China to halt production, but even if work resumes on Monday as planned, sources told Nikkei that there will be a shortage of components. The three AirPods assemblers are scheduled to resume work on Monday, but “production utilization rates may reach just 50% at best in the first week given the current conditions,” the report says.
Currently, Apple’s assembly partners are said to have “two weeks’ worth of materials and components needed for AirPods assembly.” They’ll have to wait for component makers across China to restart operations in order to receive new supplies.
“One of the big concerns is whether other parts suppliers in China can smoothly resume work to produce enough parts for final assembly,” the person said. “We really have to wait and see how things play out next week. If the assemblers could not get enough supply of parts in two weeks, it will be a big problem.”
Apple had reportedly ordered its suppliers to produce 45 million AirPods units during the first half of 2020 in order to keep up with “surging demand for the new wireless earphones.” Apple’s plan to “aggressively” ramp up production, however, is now in limbo.
Currently, all finished products are being reserved for Apple’s own retail stores and online store. This puts most of the supply constraints on other retailers. On Amazon, for instance, AirPods Pro are completely out of stock.
With that being said, even directly from Apple, AirPods Pro are still backordered by over a month. Apple CEO Tim Cook acknowledged AirPods supply constraints during Apple’s Q1 2020 earnings call last month, but could not offer a timeline on when supply and demand will come into balance.
FTC: We use income earning auto affiliate links. More.
Comments