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Apple warns Coronavirus outbreak will impact its revenue in the first quarter

Apple is the first major tech company to warn against impact of Coronavirus outbreak on its revenue.

  • Published: February 19, 2020 9:26 AM IST
Apple Store Hong Kong Stock 1

Image Credit: Karthekayan Iyer


Apple has warned that Coronavirus outbreak will affect its business during the first quarter. The company announced that worldwide iPhone supply will be temporarily constrained. In an investor update late Monday, the tech giant said it no longer expects to meet the revenue guidance it provided last month for the upcoming quarter. Also Read - Apple AirPods Pro Lite and iPad Pro production delayed due to Coronavirus

“Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors,” the company said in a statement. Also Read - Apple iPad: Why is there still no dedicated Instagram app?

The first is that worldwide iPhone supply will be temporarily constrained. “While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated,” the company said. Also Read - iPhone 9: Apple's iPhone SE successor likely to launch on March 31

The second is that demand for its products within China has been affected. “All of our stores in China and many of our partner stores have been closed,’ it added. The tech giant closed all 42 retail stores in the country from February 1 based on the latest advice from leading health experts. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic.

“We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout,” Apple informed.

The company said its quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as its best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. “These iPhone supply shortages will temporarily affect revenues worldwide,” the company explained.

Chinese health authorities on Tuesday said it received reports of 1,886 new confirmed cases of novel coronavirus infection and 98 deaths on Monday. Among the deaths, 93 were in Hubei Province, three in Henan, and one in Hebei and Hunan respectively. Over 1,700 people have been killed to date.

According to Apple, outside of China, customer demand across its product and service categories has been strong to date. “The situation is evolving, and we will provide more information during our next earnings call in April. Apple is fundamentally strong, and this disruption to our business is only temporary,” said the company.

Apple is revising its revenue guidance for the second time in nearly 13 months. The company had made similar announced in January last year due to slow demand for iPhone in China. While the company has started expanding its manufacturing base outside China, the company is still dependent on the market. Apple supplier Foxconn would keep its factories shut for some more time in the wake of the deadly coronavirus outbreak in the country, according to reports. There are also reports that Apple’s plans for new products have also been hit.

(Written with IANS inputs)

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  • Published Date: February 19, 2020 9:26 AM IST


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