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Apple won’t meet quarterly forecasts because of coronavirus outbreak

Christian de Looper
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It looks like Apple may be impacted by coronavirus, after all. The company today warned investors that it was unlikely to meet its second-quarter revenue forecast due to a few factors related to the coronavirus outbreak.

Apple cited coronavirus-related two reasons for not meeting revenue forecasts. For starters, Apple makes most of its products in China, and coronavirus, officially known as Covid-19, has caused the company to temporarily halt production and even close retail stores there. Apple says that all of the facilities it uses to manufacture iPhones are outside of Hubei province, which is the epicenter of the outbreak. While they have all been reopened, it says that production has been ramping up slowly.

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“The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues,” said Apple in a statement.

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The second major factor has more to do with iPhone demand than supply — the company says that iPhone demand in China has slowed amid the outbreak. This likely has to do with the closing of many of Apple’s retail stores and reduced hours for others. China is currently the third-largest market for iPhones, after the U.S. and Europe.

While Apple’s original forecast for the quarter was for revenue of between $63 billion and $67 billion, the company has yet to announce a revised figure.

It’s currently unclear exactly how big of an impact coronavirus could have on Apple’s near-term plans. Rumors indicate that Apple will launch a new low-cost iPhone in the spring, however it’s possible that the outbreak could delay that launch, or at least make for longer delivery times once the device is finally announced. We’ll have to wait and see if the outbreak has an impact on other iPhone launches later in the year, which are likely to be announced in September.

“The situation is evolving, and we will provide more information during our next earnings call in April,” the company said. “Apple is fundamentally strong, and this disruption to our business is only temporary. Our first priority — now and always — is the health and safety of our employees, supply chain partners, customers, and the communities in which we operate.”

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Christian de Looper
Christian de Looper
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