Apple Says It Will Not Meet Revenue Plans
Apple on Monday said it no longer expects to achieve its latest revenue guidance given the impact of the coronavirus epidemic on iPhone production and sales in China. Apple's guidance warning comes a week after its contract manufacturer Foxconn got permission to re-open two of its China-based factories after work was disrupted because of the coronavirus. However, Apple said in an investor update that it is experiencing a slower return to normal conditions than anticipated.
The company cited constrained iPhone production--presumably from factories lacking full staffing--as well as lowered demand in China for its expected guidance miss.
Last week, market research firm TrendForce said it was slashing its forecast on iPhone production in the quarter by 10 percent, or 4.5 million units.
The coronavirus crisis is creating temporary constraints in iPhone supplies worldwide, Apple said in its statement.
"While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated," the company said. "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.
Meanwhile, demand for Apple products in China has taken a hit with many stores closed, reduced hours at other stores and "very low" customer traffic, Apple said.