The Wuhan coronavirus threatens to cut China's smartphone sales in half and may spell trouble for Apple's iPhone production, analysts say
It's unclear precisely how severly the coronavirus spread will impact Apple's business, but the company said in its fiscal first quarter earnings report that it had factored any ramifications into its guidance for the second quarter of 2020 — which it predicts will fall between $63 billion and $67 billion. But that was back at the end of January when the impacts of the outbreak were less clear.
"Let's not sugarcoat it: if true , this production news out of China over the weekend will be a shock to the system and disrupt the supply chain further for Apple on both its core iPhone franchise and AirPods unit production, which is already facing a shortage heading into this week," the Ives and Backe wrote in the note.
These coronavirus-related setbacks also come as Apple's iPhone business and its sales performance in China have rebounded after a tough 2019. Apple's iPhone revenue for its first fiscal quarter of 2020 surpassed analyst expectations to hit $55.96 billion, marking year-over-year growth driven by strong demand for the iPhone 11 and iPhone 11 Pro.
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