Coronavirus has taken the whole world by storm. The biological disaster which has spread like wildfire over the previous few weeks has cost nearly two thousand lives as of now, and the death toll keeps on rising. With thousands of people suffering from the COVID 2019, which is the diseased condition caused by the n-Coronavirus, there is hardly any progress to be seen. The disease has caused a slowdown in the global economy, of which China remains a major contributor.
In such a scenario, many companies have suspected a loss in revenue for the current quarter than they had expected. This is because there has been an acute shortage in the supplies of devices. As per Apple, “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.”
Just a few days ago, the International Monetary Fund or the IMF caused a stir in the business world when it said that the recent global epidemic would have adverse consequences in the global economic order. It has reiterated that the production will be slowed, and the outcomes will be diminished in this fiscal year. The scares are on the rise as the disease whose center is the Chinese city of Wuhan spreads to other parts of the world. Given that globalization is at its zenith, there should not be two minds over the same.
The first and foremost reason, as the company wrote in its blog, was the restrained iPhone supplies. Apple has mentioned that its iPhone making partner sites are located in the exteriors of the Hubei province. As the conditions stabilize, many of these partner sites have begun to get opened, but the manufacturing is taking place more slowly than the company had estimated. Thus, the supplies will be reduced, and the global revenues of the company shall be affected.
Secondly, there is a reduction in consumption. The company has said that despite the opening of contact centers and Apple authorized stores, a fewer number of people visit the facility. And the slowdown can be seen in the case of stores that are already open. Such stores have been functioning at a very slow pace and are generally greeted with a very less number of usual customers. Such stores are already working at reduced hours in compliance with the health, security, and safety suggestions of the company and the state.
Apple maintains that its first priority has been to ensure the health and safety of its employees, community, supply chain partners, and consumers. The brand also made it a point to underline that the slowdown is temporary by saying that “Apple is fundamentally strong, and this disruption to our business is only temporary.” Given that China is currently the third-largest market for iPhones, after the United States and Europe, the closing of big retail stores will certainly have an impact.
While the demand for Apple’s products remains firm outside of China, but even then, the loss cannot be overlooked, and the declining revenue can’t be undone at least in this quarter. We hope that the world health order gets into form as soon as possible, and the economy gets back on track.
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