Apple has warned that the disruption in Chine due to the coronavirus will mean that worldwide supplies of the iPhone will be affected. Apple are the first major US company to say that the epidemic will hit its finances. With most stores in China either closed or operating at reduced hours, sales of Apple products would be lower, the company said. Apple said that while the iPhone manufacturing partner sites were located outside the Hubei province – and while all of these facilities have reopened – they were ramping up more slowly than had been anticipated.
Analysts have estimated that the virus may slash demand for smartphones by half in the first quarter in China, which is the world’s biggest market for the devices.
“While we have discussed a negative iPhone impact from the coronavirus over the past few weeks, the magnitude of this impact to miss its revenue guidance midway through February is clearly worse than feared,” said Daniel Ives, Wedbush analyst.
But despite hopes that factories and shops are slowing getting back to normal, Apple’s warning will underline that China’s economy will be seriously affected by the coronavirus.
The head of the International Monetary Fund, Kristalina Georgieva, has said there could be a cut of about 0.1-0.2 percentage points to global growth, but stressed there was much uncertainty about the virus’s economic impact.
www.bbc.co.uk/technews (18th February)