Apple is expected to be hit hard by the Coronavirus. Apple produces more than 90 percent of iPhones in China.
The company said in a report on its first-quarter earnings for investors on the 17th that it will be difficult to achieve its first-quarter sales forecast this year. This is why production disruptions and sales declines in China are occurring. In the aftermath of the Coronavirus, production facilities in China received the hit. And sales in China decreased due to weak consumer sentiment.
“Although iPhone manufacturing plants are outside of Hubei Province and all facilities have started to operate again, the normalization rate is slower than we expected,” Apple said on the same day. “The supply shortage of iPhones will temporarily affect global supply.”
Foxconn, China’s largest iPhone assembly company, even offered incentives of 3,000 yuan. Encouraging employees to return, but workers are reportedly hesitant. Foxconn plans to recover 50 percent of its production in China by the end of this month. It also plan to raise it to 80 percent in March.
Consumers also seem to lost interest on Apple due to Coronavirus outbreak
The weak consumer sentiment in China is also playing a part. Many of the 42 Apple stores in China have closed or cut their business hours. And fewer consumers are looking for iPhones. China’s iPhone market is the third largest in the world after the United States and Europe.
“The stores that had many visitors were mostly closed due to safety concerns. And only a few shops with fewer visitors are operating in limited time zones,” Apple said. “We will resume business in a safe manner as much as possible. With the safety of customers and employees as we can.”
Some forecast that Apple might also delay the release of new products. Apple’s new low-end model, priced at$400, has finished producing prototypes in China. And it will begin mass production in the middle of this month. However, CNBC said it cannot rule out the possibility that Apple might delay the launch due to the influence of Coronavirus.
This is the second time since last year that Apple revised its sales outlook due to China’s influence. Last year, Apple lowered its forecast for iPhone sales in China for the first time in 15 years. Back then, sales were sluggish due to advances in native brands such as Huawei and premium policies for iPhone X models.
