Apple said slower production due to the Coronavirus (Covid-19) means it will not be able to meet expectations for the fiscal second quarter to end March. The company had guided for revenue of USD 63-97 billion from 58 billion the year before, and a gross margin of 38-39 percent. The company noted that the disruption to results is only temporary and that its business is fundamentally strong.
iPhone supply shortages and lower demand within China
Apple said work is starting to resume in China after the extended New Year holiday but at a slower than expected pace, even though its manufacturing partner sites are located outside the Hubei province, where the outbreak started in Wuhan. This means that the supply of iPhones will be temporarily constrained, affecting revenues worldwide.
Also, results will be impacted by lower demand for Apple products within China, where the company generates around 15 percent of revenues. The company closed all of its stores in the country; many partner stores also shut down with the epidemic. Those shops that have remained open have done with reduced hours, and recorded very low customer traffic. Apple said it is gradually reopening its shops and that all of its corporate offices, contact centres and online stores in China are open.
Outside of China, customer demand across the company’s product and service categories has continued strong to date and in line with forecasts.
Apple said it will be more than doubling donations to support those treating the ill and working to contain the spread of Covid-19.
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tp:today
