Apple Warns That Coronavirus Will Hurt Revenue

February 18, 2020
Business

Fears over the coronavirus’s impact on the global economy and business have been growing. As of Tuesday morning in China, more than 72,000 people had been infected by the coronavirus and over 1,800 had died worldwide, officials reported. About three-quarters of a billion people in China are under some kind of lockdown orders, according to a New York Times analysis.

Apple’s action on Monday “is the first of many we’re going to see around the coronavirus impact,” said Daniel Ives, managing director of equity research at Wedbush Securities. “Apple is heavily exposed. It confirms the worst fears that the iPhone impact was going to be more dramatic than expected.”

Apple, which is widely regarded as a bellwether of global supply and demand for goods, has bet big on China in recent years. Timothy D. Cook, the chief executive, worked with China’s telecom providers to introduce the iPhone in the country last decade. After that, Apple’s already substantial sales took off further. China is now the company’s second largest market after the United States.

What do you need to know? Start here.

Updated Feb. 10, 2020
- What is a Coronavirus?
  It is a novel virus named for the crown-like spikes that protrude from its surface. The coronavirus can infect both animals and people, and can cause a range of respiratory illnesses from the common cold to more dangerous conditions like Severe Acute Respiratory Syndrome, or SARS.
- How contagious is the virus?
  According to preliminary research, it seems moderately infectious, similar to SARS, and is possibly transmitted through the air. Scientists have estimated that each infected person could spread it to somewhere between 1.5 and 3.5 people without effective containment measures.
- Where has the virus spread?
  The virus originated in Wuhan, China, and has sickened tens of thousands of people in China and at least two dozen other countries.
- How worried should I be?
  While the virus is a serious public health concern, the risk to most people outside China remains very low, and seasonal flu is a more immediate threat.
- Who is working to contain the virus?
  World Health Organization officials have praised China’s aggressive response to the virus by closing transportation, schools and markets. This week, a team of experts from the W.H.O. arrived in Beijing to offer assistance.
- What if I’m traveling?
  The United States and Australia are temporarily denying entry to noncitizens who recently traveled to China and several airlines have canceled flights.
- How do I keep myself and others safe?
  Washing your hands frequently is the most important thing you can do, along with staying at home when you’re sick.

Apple also assembles most of its products in China. Foxconn, the Taiwan company that makes iPhones and other gadgets on behalf of Apple and global electronics companies, has declined to detail which plants have reopened since the Lunar New Year holiday ended but denied a media report that it was aiming to reach 50 percent production levels by the end of this month. None of the factories that make iPhones are in Hubei Province, the center of the coronavirus outbreak.

Countries including Japan and Germany have already been grappling with slowing growth. Japan, which counts on a lucrative flow of Chinese tourists, as well as exports to the country’s enormous market of consumers, may potentially fall into a recession. And there are concerns the coronavirus could crimp Europe’s already weak growth.

Article source: https://www.nytimes.com/2020/02/17/technology/apple-coronavirus-economy.html?emc=rss&partner=rss