Closed Chinese Apple Stores... Production and Sales Hit by Novel Coronavirus

42 Apple Stores Closed Until the 9th
Apple Generates 15% of Revenue from China
Concerns Over Delay in Selling 1 Million iPhones
iPhone Supply Chain Disruptions Inevitable

Beijing Apple Store

[Asia Economy Reporter Han Jinju] Apple has decided to close all Apple Stores across China until February 9th due to concerns over the spread of the novel coronavirus (Wuhan pneumonia). With a high dependence on production in China and worries about declining sales, Apple is facing increasing challenges.

On the 2nd (local time), Apple announced that based on advice from health experts, it will close 42 Apple Stores, offices, and customer centers across China until February 9th. Apple stated, "We will closely monitor the situation and hope to reopen stores as soon as possible."

Apple had previously closed its Apple Store in Wuhan, but the impact on sales was not significant. However, by expanding the store closures nationwide this time, a decline in sales is inevitable.

Daniel Ives, an analyst at Wedbush Securities, said, "With restrictions on travel between major cities across China and within major cities, about 1 million iPhone sales could be postponed from the March quarter to the June quarter."

Apple's sales in China account for 15% of its total revenue. One million units represent about 3% of the annual iPhone sales in China.

Analyst Daniel Ives predicted, "If the novel coronavirus continues in China until late February or March, it could impact not only consumer demand in China but also Apple and global market sales."

Apple's iPhone supply chain is also exposed to potential risks. Apple's dependence on production in China exceeds 50%. Due to the novel coronavirus, the Chinese government extended the Lunar New Year holiday, making factory operations impossible until the 10th.

Apple had been preparing production for the launch of mid-range iPhones starting this month, but the schedule is likely to be delayed. The industry expects total orders to exceed 30 million units. As a result, Apple issued a revenue forecast of $63 billion to $67 billion for the next quarter on the 28th. Considering the uncertainty caused by the novel coronavirus, the expected revenue range has widened significantly from the original forecast.

CEO Tim Cook said during a conference call, "We will suspend operations until the 10th of this month," adding, "We are looking for alternative suppliers to make up for the expected production losses."

This content was produced with the assistance of AI translation services.