Apple’s smartphone sales hit hard by outbreak
February 25, 2020 Category China News Round-up, Weekly
The smartphone industry has been hit hard, as the COVID-19 outbreak continues. Industry analysts forecasted Apple’s iPhone sales in China may fall by at least 40% to 50% in February and March compared with the same period last year. Senior industry expert Liang Zhenpeng told the Global Times the COVID-19 outbreak has dealt a heavy blow to the sales of all mobile phone suppliers in China, including Apple. “The iPhone’s sales in the first quarter of this year are likely to be less than half of the same quarter in 2019,” he said. “Mobile phone sales, both online or offline, are very difficult during this period, because the supply chains can hardly be normalized.” Apple CEO Tim Cook said on his Sina Weibo account, China’s Twitter-like social media, the company welcomes back employees and customers and looks to work alongside their manufacturing partners to resume operation as safely and steadily as possible.
“Apple has a global supply chain, not just in China. But China, as an important part of the chain, will affect their businesses,” Wei Jigang, Research Fellow with the Development Research Center of the State Council, said, adding that the impact could influence the launch of new Apple products. Apple shares slid after lowering its Q1 sales guidance due to the novel coronavirus. The company’s stock has been volatile for nearly a month, with industry experts believing the outbreak contributed to the uncertainty. Apple announced on February 1 the temporary closure of all its retail stores across China amid the epidemic, but some of them have meanwhile reopened with flexible working hours that are adjusted depending on the outbreak.
A worker surnamed Meng at Apple’s biggest contract manufacturer, Foxconn’s Zhengzhou plant in Henan province, said the factory resumed work on February 10, but due to restrictions of traffic and other problems amid the epidemic, some employees from other places are unable to rejoin work. The factory is now recruiting new workers to meet staff shortages, but the health of each employee has to be vetted and many are still in quarantine. Apple Analyst Shannon Cross from Cross Research anticipates people are going to experience iPhone shortages outside of China. “In theory, it shouldn’t be demand destructive. It should just mean there should be a larger backlog of demand when these issues are resolved,” she told Bloomberg. Apple is not the only smartphone company that has been hit by the epidemic. China’s smartphone shipments declined 50% to 60% during the 2020 Spring Festival holidays due to the novel coronavirus outbreak. So far, about 60 million smartphones remain unsold, among which Huawei’s devices account for one-third, industry analysts said, as reported by the Global Times.
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