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Apple to miss revenue target; China shutdown impacts iPhones supply

BusinessToday.In     February 18, 2020

Apple Inc is set to miss its revenue target for the March quarter due to disruption in iPhone production amid coronavirus outbreak in China. The smartphone maker has also said that the supply of iPhone may be temporarily affected. The shortage will temporarily affect revenues worldwide, the company said in a statement.

Last month, Apple had set revenue guidance of $63 billion to $67 billion for the March quarter. The company's revenue from China stood at $13.17 billion during the December quarter, a decline of nearly $5 billion from $17.96 billion in a year ago period. This amounts to 15 per cent of Apple's total revenue of $91.8 billion.

"Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter due to two main factors," Apple Inc said in a press release on Monday.

"While our iPhone manufacturing partner sites are located outside the Hubei province - and while all of these facilities have reopened - they are ramping up more slowly than we had anticipated," it said.

Also Read: Apple expected to sell over 100 million wireless hearables units in 2020

China's central city of Wuhan is the epicentre of coronavirus outbreak which killed over 1,770 in the country and stricken some 70,500 people, with millions of others confined to their homes.

 "The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues," Apple said.

The company said that demand for its products within China has been affected as many of its partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic, it said.

Also Read: Apple penalised $27 million for slowing down old iPhones

"We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout," iPhone maker said.

The company, however, maintained that its customer demand across product and service categories has been strong outside China.

By Chitranjan Kumar

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