Coronavirus Outbreak Impacts Apple iPhone Supplies

Apple’s iPhone manufacturing partners are struggling to ramp back up

What: Apple offered rare, mid-quarter guidance for future earnings, announcing that the COVID-19 novel coronavirus is now expected to impact iPhone supplies and dampen its original revenue projections.

How: While manufacturing partners have been returning to work, Apple says the process has gone much more slowly than anticipated and now projects that iPhone supplies will be constrained around the world.

Why Do You Care: Don’t shed a tear about Apple. The company’s business is extremely healthy, but it can’t control how quickly China will return to normal. In the coming weeks and months, it may be more difficult to buy a new iPhone as inventories could soon run low.

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Even as some predict that the deadly COVID-19 novel coronavirus will soon plateau and then recede in China, its effects are being felt in new and unanticipated ways. On Monday, Apple announced that global iPhone supplies will be constrained because its Chinese based manufacturing partners are returning to full operation more slowly than was originally anticipated.

The announcement comes just two weeks after Apple’s most recent earnings report where Apple execs expressed uncertainty about the virus’ impact on its business. It had already faced some temporary Chinese retail store closures and travel restrictions.

This new guidance points to supply constraints, reduced Chinese demand for Apple products (based on store closures and other outlets operating at reduced schedules), and the inevitable revenue adjustment because of it.

As for what happens next: “The situation is evolving, and we will provide more information during our next earnings call in April,” wrote Apple in its release on the guidance.

Obviously, this could soon impact your ability to buy a new iPhone. Considering the scale and on-going human cost of this global health crisis, we can probably all stand to be a little patient.

Via: CNN Business