Apple sales target miss due to coronavirus, company says
FOX Business’ Susan Li reports Apple took 60 percent off the Dow due to closed factories impacted by coronavirus, but it’s ‘only temporary.’
Apple’s coronavirus problems could last for a lot longer than originally anticipated.
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The Cupertino, California-based iPhone maker recently warned iPhone supply and consumer demand have both been disrupted by the virus’ outbreak. Returning production to full capacity, which is vital for Apple as it enters the 5G supercycle, one of its most important upgrade cycles ever, has proven to be difficult.
“Is this late March, April, or May/June with the answers to these questions playing a vital role in the mathematical gymnastics exercise to gauge what iPhone units and overall global demand could look like for FY20 and better understanding the timing impact from the key China demand which is slated to comprise 17%-20% of overall iPhone demand for the next 12 to 18 months based on our estimates,” Dan Ives, managing director at Wedbush Securities, wrote in a note sent to clients Monday.
The coronavirus outbreak, which has sickened at least 78,811 and killed 2,462, has led to the lockdown of more than 60 million people in China. In an effort to help prevent the spread of the virus, scores of companies, including Apple, have temporarily shuttered stores and factories or reduced operations.
The delays are sparking causing some to begin looking at what a worst-case scenario may look like for the iPhone maker.
According to Ives, such a scenario would include Apple’s supply chain not reaching full capacity until late May or early June, its 5G product launches set for the fall being pushed back past the holiday season and Chinese demand destruction being worse than expected.