Confirming speculation that the coronavirus will have an adverse impact on Apple\u2019s bottom line, the Cupertino-based company today issued a brief press release stating that it\u2019s expecting a revenue shortfall this quarter on account of the virus. The announcement shouldn\u2019t come as much of a surprise in light of reports of factories in China shutting down as health professionals are still actively seeking to contain the coronavirus and prevent it from spreading further.<\/p>\n
As Apple notes, the coronavirus\u2019s impact on the company is two-fold. Again, with some factories either entirely closed or operating at partial capacity, overall supply will be lower. Additionally, Apple notes that all of its stores in China have been closed on account of the coronavirus.<\/p>\n
Here\u2019s Apple\u2019s full press release:<\/p>\n
\nAs the public health response to COVID-19 continues, our thoughts remain with the communities and individuals most deeply affected by the disease, and with those working around the clock to contain its spread and to treat the ill. Apple is more than doubling our previously announced donation to support this historic public health effort.<\/p>\n
Our quarterly guidance issued on January 28, 2020 reflected the best information available at the time as well as our best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on February 10. 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.<\/p>\n
The first is that worldwide iPhone supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province \u2014 and while all of these facilities have reopened \u2014 they are ramping up more slowly than we had anticipated. 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. These iPhone supply shortages will temporarily affect revenues worldwide.<\/p>\n
The second is that demand for our products within China has been affected. All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic. 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.<\/p>\n
Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations.<\/p>\n
The situation is evolving, and we will provide more information during our next earnings call in April. Apple is fundamentally strong, and this disruption to our business is only temporary. Our first priority \u2014 now and always \u2014 is the health and safety of our employees, supply chain partners, customers and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.<\/p>\n<\/blockquote>\n
\n\tImage Source: Alex Tai\/SOPA Images\/Shutterstock<\/span><\/span><\/p>\n
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\n\t\tA life long Mac user and Apple enthusiast, Yoni Heisler has been writing about Apple and the tech industry at large for over 6 years. His writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and most recently, TUAW. When not writing about and analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions, the most recent examples being The Walking Dead and Broad City.\t<\/p>\n<\/div><\/div>\n