Apple will not receive the expected revenue due to coronavirus

Apple said that he could not get the revenue, previously announced in the quarterly forecast due to the decline in iPhone shipments worldwide and falling demand in China, an outbreak of coronavirus infection.

Previously, the company expected revenue of between $63 billion to $67 billion, Apple has not announced a new forecast for income for the current finkvartal.

Apple said in a recent quarterly forecast, published January 28, 2020, reflected on the basis of best estimates of rate of return to the usual schedule. However, the recovery is slower than expected.

Apple makes most of the iPhone and other gadgets in China. Because coronavirus is temporarily suspended production and closed retail outlets in China. Some Apple stores re-opened in China with an abbreviated schedule last week.

Almost all iPhones are created in two factories Taiwanese assemblers Foxconn and Pegatron, located about 500 km from Wuhan, where there was an outbreak of the coronavirus. Foxconn, the largest partner of Apple, plans by the end of February at least half resume their production in China, reported earlier by Reuters. The contract manufacturer also plans to resume 80% of production in China in March.

Foxconn has increased its capacity at plants in Vietnam, India and Mexico to handle the outage in China, but the manufacturer can fix the fall in revenue in the first quarter of 2020 because of the epidemic, which began to affect the activities of a contract manufacturer.

At the moment, the factories producing the iPhone in China had reopened, but Apple stated that it still expects shortages of smartphones worldwide.

Apple is the second time reviewing the forecast because of the situation in China. In January 2019, Apple was forced to cut its forecasts for revenues for the first quarter of 2019 fiscal year due to weak iPhone sales in China.

Tim cook in a letter to the shareholders notes that outside of China the demand for services and Apple devices remained high and in line with expectations.

the Impact of the coronavirus in the global technology industry, which hopes for a recovery in 2020, can be serious. Analysts warn that the virus could reduce global supplies of smart phones by 10% this year.

Manufacturers of Android smartphones, including Huawei, Oppo, Vivo and Xiaomi, as well as laptop manufacturers such as HP and Dell also produce their devices in China. Only South Korea’s Samsung Electronics has completely transferred the manufacture of smartphones from China, although it still supplies components from the country.

In China directly on Apple, there are about 10 thousand people, millions more employed in the supply chain to other company’s gadgets, such as iPad, iPhone and Apple Watch.

it is Expected that this spring Apple will announce the release of a new, cheaper model of the iPhone. It is unclear whether delays in China on this launch.