- Tram Ho
Apple relies heavily on manufacturing in China, while its people are also a significant source of revenue. While many experts believe it is too early to talk about the impact of the Wuhan pneumonia on Apple, any long-term or severe disruption will negatively impact its production and sales.
Apple is still looking to recover here. In 2019, demand for Apple devices will drop, trade tensions will lead to supply chain instability. However, in the last three months of the year, sales have rebounded largely thanks to the iPhone 11. “The joy is short,” the widespread pneumonia is likely to hinder Apple’s hope.
DA Davidson analyst Tom Forte said Apple’s growth in China was impressive. If it weren’t for the corona virus, this performance would not be in dispute. However, corona virus is a big risk that investors need to monitor. Recently, Apple forecast revenue in the first quarter of 2020 to reach 63 to 67 billion USD, a wider margin than usual due to the instability of the corona virus.
The corona virus is spreading rapidly. More than 7,700 cases worldwide have at least 170 deaths in China. Officials also extended the Chinese New Year holiday from January 30 to February 2, forcing companies to close longer in hopes of curbing the spread of the virus.
Some retailers such as Starbucks and Pizza Hut announced that they would suspend operations after Tet holiday. Some airlines offer customers refunds. Apple CEO Tim Cook said he had closed an Apple Store in China and shortened the working time at the open stores. The company regularly cleans and cleans employees regularly.
Unlike other retailers, Apple has more to worry about than selling to customers. Production – especially the iPhone – is concentrated in China. “Apple defective” has a number of supply partners in Wuhan – a large production center – and Mr. Cook said Chinese directors have delayed the opening of the factory in the region from late January to 10/2.
Apple must include production risks at these factories in its current quarterly business forecasts and plan based on replacement sources. However, the impact of pneumonia epidemic on other production facilities across the country is “unclear”.
Source : Genk