In an article published on CNBC on Presidents’ Day, Apple (AAPL) was confirmed to have warned that it does not expect to meet its Q2 forecast for revenue. Apple pointed to global supply constraints for iPhones and lower Chinese demand as a result of the coronavirus outbreak. Apple had previously expressed in January that it expected revenue of $63 billion to $67 billion in its fiscal Q2. Apple makes the majority of iPhones and other products in China. Here’s the letter from Apple today. But here’s sem important excerpts:
“The first is that worldwide iPhone supply will be temporarily constrained. While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues. These iPhone supply shortages will temporarily affect revenues worldwide.
The second is that demand for our products within China has been affected. All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic. We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout.
Outside of China, customer demand across our product and service categories has been strong to date and in line with our expectations.”
With Apple being such a large component of the major indices and many portfolios it is wise to keep aware of their situation as it could bring about selling and broad pressure. To learn more about Apple (AAPL) and track its ongoing progress at Vista Partners Apple (AAPL), Coverage Page.