Apple Computer is being heavily effected by the coronavirus outbreak in China, with retails stores being closed, and device manufacturing brought to a standstill. The company issued a statement today saying previous guidance is no longer valid.
The company said that the iPhone, which generates the bulk of Apple’s revenue, is temporarily constrained due to production ramping up more slowly than anticipated. “Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated,” the company said in a statement Monday. In addition, demand for iPhones has been reduced because stores in China have been closed or operating with reduced hours and few customers, the company said, reported Bloomberg.
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, read the statement from the company.
Although Apple is heavily involved in China, more than most tech companies, it will be instructive to see what other listed names use the coronavirus as a reason to reduce guidance going forward.