Apple warns China virus will cut iPhone production, sales

Ruben Fields
February 18, 2020

In an investor update, Apple said it no longer expects to meet the revenue guidance it provided last month for the upcoming March quarter.

"We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can", said Apple in its statement, adding that iPhone demand is on target in other regions.

The Cupertino, California-based company said Monday that all of its iPhone manufacturing facilities are outside Hubei province, the epicenter of the outbreak, and all have been reopened.

Meanwhile, the letter said, all Apple Stores and many authorised third party shops have closed, and those that remain open "have been operating at reduced hours and with very low customer traffic" as consumers hole up indoors to avoid infection.

The second factor for Apple's revenue-shortfall warning for the March 2020 quarter is that that demand for Apple products in China has declined after all of its retail stores in China (and many of its partners) were closed because of the health crisis. Analysts on average estimated US$65.23 billion, according to data compiled by Bloomberg. "As you can see from the range, anticipates some level of issue there". Apple also says it is more than doubling its previously announced donation to help in the public health fight against the Wuhan coronavirus.

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It confirms the worst fears about just how impacted Apple and its supply chain has been by coronavirus outbreak.

"The situation is evolving, and we will provide more information during our next earnings call in April", the company said. The auto industry is another sector that has been affected by disruption to its supply chain.

It is the second time in a little over a year that Apple has to cut its revenue guidance due to concerns in China.

Apple has warned investors that it will miss its revenue forecast for this spring due to the devastating impact of coronavirus on the Chinese economy.

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