- Apple could lose out on $4 billion in sales as the coronavirus affects its ability to produce sufficient iPhones and AirPods.
- In a Monday press release, the firm warned that it expected to take a revenue hit because of the novel coronavirus outbreak in China.
- The Chinese city of Wuhan is thought to be the origin of the virus, which so far has infected more than 71,000 people and killed more than 1,700. The cases are concentrated in China, but it has spread to more than 25 other countries.
- Analysts say Apple's facilities in China have reopened "more slowly than expected."
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Apple could lose out on $4 billion in sales as the novel coronavirus threatens to severely affect the company's supply chains in China, according to analysts.
Apple warned on Monday that it did not expect to hit its March revenue targets because of the coronavirus. The virus, which is believed to have originated at a wet market in Wuhan, the capital of the Hubei province in China, has killed more than 1,700 people and infected more than 71,000.
"We do not expect to meet the revenue guidance we provided for the March quarter due to two main factors," Apple said in a statement issued Monday. The first, Apple noted, was slowed iPhone production because of the virus, and the second was slowed Chinese demand.
According to analysts at Instinet, an independent broker based in New York, a slowdown in iPhone and AirPod production could see sales drop to about $61 billion from $65 billion. "Apple indicated all of its facilities are outside of Hubei province and have reopened ... [but] more slowly than expected," Jeff Kvaal, an Instinet managing director, said.
While the virus has spread to more than 25 countries, the cases have been concentrated in China, where more than 16 cities have been on lockdown — affecting nearly 50 million people — attractions and stores have been shuttered, and the Lunar New Year holiday was extended to stem the spread.
According to The New York Times, 42 Apple stores in China have closed and only seven have reopened. The company said it would continue to monitor the situation, saying the health and well-being of those affected by the coronavirus were the company's primary focus.
While the announcement made by Apple was unusual, the company is not alone in being affected by the coronavirus.
China is the site of a quarter of the world's manufacturing, and the auto industry along with other tech companies like Facebook are dealing with disruptions to their supply chains.