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Apple reportedly slashes AirPods production as competition from Samsung, Xiaomi intensifies

Apple will reduce production of AirPods for this year by up to 30%.

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Apple launched its first-gen Airpods in 2016, inspiring a wave of similar wireless earphone products from companies including Samsung, Huawei and Xiaomi.

Sarah Tew/CNET

Apple has reduced planned production of its AirPods wireless earphones by 25 to 35 million units this year, or approximately 25 to 30%. The reduction comes as sales weaken and competition from Asian rivals intensifies, according to a report published Wednesday by the Nikkei Asia.

Apple now plans to produce 75 to 85 million AirPods, compared with an earlier number of 110 million units, the report says, citing sources briefed with the matter. The forecast reduction suggests demand for AirPods have been slowing following years of double-digit growth rates for shipments. 

"Year-over-year growth [of Apple's hearables] slowed to 22%" this year, research firm IDC said in a March report.  

"The slowing growth reflects the huge amount of adoption [of AirPods] that the market has seen in recent quarters."

The report of production cuts comes as Apple reported a stellar set of quarterly earnings that saw year-on-year revenue grow by 54% to $89.6 billion. The company's laptops and desktops clocked their best sales quarter ever during the second fiscal quarter. That amounted to $9.1 billion in sales, higher than the iPad, Apple Watch or AirPods.

Apple launched AirPods in 2016, and has since dominated the Bluetooth true wireless headphones market. Following the launch of AirPods, Asian rivals including Samsung and Xiaomi have launched similar wireless earphones, which in the case of Xiaomi at least, are retailing for significantly less than AirPods. Xiaomi's hearable line has grown 55% since last year, according to IDC's March report.

Apple declined to comment on the AirPods production cuts.