Coronavirus impact means Apple won’t meet quarterly revenue target
- Store closures in China have led to lower iPhone demand, while company is experiencing ‘slower return to normal’ than anticipated, it says in statement
- Apple had originally forecast revenue of US$63 billion to US$67 billion for fiscal second quarter ending in March
Apple does not expect to meet its revenue guidance for the March quarter due to work slowdowns and lower demand due to the outbreak of novel coronavirus in China.
The company said that the iPhone, which generates the bulk of Apple’s revenue, is temporarily constrained due to production ramping up more slowly than anticipated.
“Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated,” the company said in a statement on Monday. In addition, demand for iPhones has been reduced because stores in China have been closed or operating with reduced hours and few customers, the company said.
Apple had forecast revenue of US$63 billion to US$67 billion for the fiscal second quarter ending in March. Analysts on average estimated US$65.23 billion, according to data compiled by Bloomberg.
The company said in January when it announced its guidance that it anticipated factories reopening beginning February 10. That process however has been slow as factory workers and manufacturing partners look to contain the virus, which has resulted in more than 1,800 reported deaths in China, from spreading further.
“This is the double-edged sword of being in China,” said long-time Apple analyst and Loup Ventures co-founder Gene Munster.