Apple announced Monday it would miss its March quarter revenue forecast and global iPhone supplies would fall because of the deadly coronavirus epidemic, triggering a fall in Asian stock markets.
The COVID-19 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, with travel bans and mass quarantines inside China forcing factories to suspend operations and shops to close.
Apple, which depends on components from Chinese suppliers and has a big market in China, has been hammered on both fronts.
“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.
The US tech giant did not disclose how much it expected the outbreak to shave off its revenues.
But 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 because of the travel restrictions.
Consumer demand in the crucial Chinese market had 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.”
Apple analyst and Loup Ventures co-founder Gene Munster told Bloomberg that the company was feeling the hit from its dependence on Chinese consumers.
“This is the double-edged sword of being in China,” he said.
“They’re the only big (US tech) company with China exposure, so they are working through the pain of what has largely been a success for the company over the past decade.”
Other Silicon Valley behemoths — such as Facebook, Amazon and Google parent company Alphabet — either have limited access to the market or are blocked outright by China’s internet firewall.
However supply chains of global firms such as Apple supplier Foxconn and auto giant Toyota have also been disrupted with production facilities in China temporarily closed.
Sportswear giants Nike and Adidas also shuttered hundreds of stores in the country this month and warned of a negative impact on their earnings.
AFP
Click Banner To Get N100,000 Bonus Now!
When you register on 1xBet using this promo code asbnewsng, you can unlock a fantastic bonus offer of N100,000! Don't miss out on this exciting opportunity. Try it now!
Founder/editor-in-chief – ASB News. If you’d like to get in touch with me, feel free to follow any of my social links below.