Apple intends to reduce the production of due to a decline in demand caused by the crisis in Ukraine and rising inflation.

The company may lower production of iPhone SE's by about 20%, or between two and three million units, starting next quarter. According to Reuters, Apple has cut AirPod production by ten million units this year alone.

Apple shares fell about 2% in pre-market trading.

The news of weaker demand reflects the predictions of analysts who warned that COVID-19 lockdowns in Chinese cities and a rise in inflation due to the conflict in Ukraine could hurt smartphone demand this year.

According to analysts, Apple faces challenges due to the lack of a design update for the latest SE and a $30 increase in its price starting with the 2020 model.

Apple is expected to launch a new iPhone line later this year, but analysts say it would be too early to predict any impact on the next range.