Apple Says It Won’t Meet Q2 Revenue Guidance Due to Coronavirus in China
Apple just issued a press release on this holiday weekend (in both Canada and the USA), to state the company may not meet its revenue guidance for the March quarter, due to the coronavirus outbreak in China.
“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,” explains Apple’s press release.
Apple says two main factors are at play here, with the first citing how worldwide iPhone supply “will be temporarily constrained.” Despite Apple’s supply chain partners in China ramping up production, the “return to normal conditions” has been slower than the company anticipated. This will result in iPhone shortages that “will temporarily affect revenues worldwide.”
The second factor, according to Apple, is the demand for the company’s products in China, which has been affected by the coronavirus. Apple Stores remain closed and those that have re-opened have limited hours and “very low customer traffic”. Partner stores have also been closed. Apple says its corporate offices and contact centres in the country, along with its online store, have “remained open throughout.”
Apple says outside of China, business is as normal, as “customer demand across our product and service categories has been strong to date and in line with our expectations.”
“Our first priority — now and always — 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,” concluded Apple, which says it will provide an update during its next earnings call, in April.
Earlier today, a new research note from Apple analyst, Ming-Chi Kuo, claimed Apple’s rumoured “iPhone SE 2” is still on track for a launch in the first half of 2020 (via MacRumors), despite the impact from coronavirus.