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Coronavirus will take a bite out of Apple’s quarterly revenues

 

The coronavarius is taking a bite out Apple’s quarterly revenues

The coronavirus has slowed production of the Apple iPhone where it is made in China and will cut into retail sales there because of store closings.

Because of these two factors, the company does not expect to meet its previously published quarterly sales estimates, Apple announced Monday in an investor update.

“Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter,” Apple said in an investor guidance.

The Cupertino, California-based company had forecast $63 billion to $67 billion in revenue for the quarter ending in March, ahead of estimates of $62.4 billion.

Apple attributed the anticipated drop in revenues to the coronavirus which has affected both manufacturing and retail sales.

“The first is that worldwide iPhone supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province—and while these facilities have reopened – they are ramping up more slowly than we had anticipated.”

World Health Organization Director Dr. Tedros Adhanom Ghebreyesus, said in a February 17th speech that there are 2,051 new cases COVID 19, and 94 percent of the new cases come from Hubei province.

Lonely in Hubei province

Overall, there have been 70,635 cases of COVID 19 in China and 1,772 deaths, Dr. Ghebreyesus said.

Apple also noted that retail demand for products within China, the world’s largest market for smartphones, has been affected and will affect revenues worldwide.

“All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and very low customer traffic. We are gradually opening our retail stores and will continue to do so steadily and safely as we can.”

Photos of Hubei province show deserted streets.

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