On Monday, February 17, 2020, Apple signals coronavirus’s threat to global businesses.
The supply chain is a problem, the company warned, as the factories slowly reopen in China, and the demand is also down, too with stores there still mostly closed.
The iPhone maker is the first company, that openly reveals that how the coronavirus has gripped China, was affecting its business, by saying that it was cutting its sales expectations for this quarter, of which a month ago it had projected to be robust.
Apple Inc is highly dependent on Chinese factories and the Chinese consumers, said in a statement that its supply of smartphones would be troubled because production was ramping up more slowly than expected as the China reopened its factories.
The company also said that the demand for its devices in China had been also hurt by that outbreak; it had closed all 42 of its stores in the country in last month and most have yet to reopen.
Apple said that the work is starting to resume around the country, but they are experienced a slower return to normal conditions, than they had been anticipated.
Most of the global firms depends on factories in China to manufacture the goods as varied as socks and the laptop computers. And the Chinese consumers, who had ridden a wave of increasing wealth, had been enthusiastic buyers of luxury goods that includes iPhones and many other items.
The constant fears are looming over the coronavirus impact on the global economy and business. More than 72,000 people had been infected, as of Tuesday morning in China, by the coronavirus epidemic and over 1,800 had died worldwide, the officials reported. About three quarters of a billion people in China are under some kind of the lockdown orders due to coronavirus.
The company’s action on Monday is the first of many, as they are going to see around the coronavirus impact,” said by Daniel Ives, who is the managing director of equity research at Wedbush Securities.
“Apple is heavily exposed to coronavirus threat. It also confirms the worst fears that the iPhone impact was going to be more dramatic than expected.”