Apple Says Coronavirus Outbreak to Affect its Global Revenues
The Cupertino-based giant is dependent on Foxconn for manufacturing iPhones, and other devices.
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Apple is to miss its revenue forecast for the March quarter due to the coronavirus epidemic, the US tech giant said Monday, warning that iPhone supplies worldwide would also be impacted, underlining the economic cost of the health crisis.
The COVID-19 virus death toll now exceeds 1,800 in China, where it has infected more than 72,000 after emerging in the central province of Hubei in December.
The virus has sparked global economic jitters, travel bans and the cancellation of high-profile sporting and cultural events. "We are experiencing a slower return to normal conditions than we had anticipated," Apple said in a statement.
"As a result, we do not expect to meet the revenue guidance we provided for the March quarter." Apple had forecast revenue of $63 billion to $67 billion for the second quarter to March.
It said that worldwide iPhone supply would be "temporarily constrained" as its manufacturing partners in China were only slowly ramping up work after being closed due to the virus.
Consumer demand in the crucial Chinese market has also been dampened after all Apple stores were shut. "Stores that are (now) open have been operating at reduced hours and with very low customer traffic," the company said.
"We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can." International Monetary Fund chief Kristalina Georgieva has said there could be a cut of around 0.1-0.2 percentage points to global growth, but stressed there was much uncertainty about the virus's economic impact.
Reports suggest China, the world's number two economy makes 70 percent of all smartphones sold on the planet, including popular brands like Apple and Samsung.
And because of this outbreak, global shipments of smartphones may be 2 percent less than expected this year, according to market researcher Strategy Analytics.
According to industry experts, if the lockdown continues for over a month or so, it will hamper the time-to-market strategy of nearly all Chinese brands in the Indian market as well. After all, Chinese still provides bulk of various semi-knocked down (SKD) components like memory chips, touch panels/cover glasses along with semiconductors for smartphone assembling lines in India.
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