Apple cuts quarterly revenue prediction as coronavirus wreaks havoc across China
All of Apple’s China stores have been shut
Three weeks ago, we reported about delays in Chinese iPhone production - a consequence of the emerging coronavirus outbreak. At the time, just a single Apple store in China had been closed, and factory production was expected to reopen in just a week.
Since the outbreak has intensified, however, Apple - one of the world’s largest technology corporations - announced ion Monday that it does “not expect to meet the revenue guidance provided for the March quarter”.
Apple’s originally estimated revenue totaling between $63 billion and $67 billion for its upcoming quarter.
Apple did not provide a new, reduced estimate in response to coronavirus developments, and instead purported two reasons behind its lowered expectations: minimal consumer activity, and slowed production.
Forty-two Apple stores in China have now been closed because of the outbreak - indicating a substantial inactivity among consumers.
“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,” said Apple.
The company’s primary concern seems to regard the safety of employees, and reasonably so: the virus has thus far killed at least 1,800 people in China.
“We are working in close consultation with our suppliers and public health experts as this ramp continues,” the company said.
Based on these devastating numbers, the disease’s economic impact will be felt worldwide. To provide some context, Apple has reduced its expected quarterly revenue on only one other occasion in over two decades; when Chinese demand for Apple products flattened at the beginning of last year.
Apple said that production and sales outside of China have “been strong to date” and in line with expectations since the virus’ inception.
The decision to withhold an updated revenue estimate, however, may reflect Apple’s uncertainty regarding how deeply the coronavirus’ devastation in China will impact global production and sales.