Apple to miss revenue forecast as iPhone supply hit by coronavirus

AFP | Published at 10:23pm on February 18, 2020

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.