Apple Misses Revenue Target as Coronavirus Disrupts iPhone Supply and Demand
Apple announces it will not meet its quarterly revenue forecast due to global iPhone supply constraints and reduced consumer demand in China caused by the coronavirus outbreak. Although Chinese manufacturing facilities reopen, the company faces ongoing shortages worldwide.
Apple warns that it does not expect to meet its quarterly revenue forecast due to the ongoing coronavirus outbreak. The tech giant cites constrained global iPhone supply and suppressed consumer demand in China as the primary reasons for the shortfall. Although Apple initially provided a wider than usual revenue range of $63 billion to $67 billion to account for uncertainty, the disruptions ultimately exceed those early estimates.
Manufacturing operations in China experience significant hurdles as the company navigates a slower than anticipated return to normal conditions following the extended Lunar New Year holiday. All iPhone production facilities in China reportedly reopen, but Apple still expects worldwide supply shortages for its flagship device. Additionally, temporary retail store closures and reduced operating schedules continue to impact direct sales in the Chinese market.
This announcement marks the second time in thirteen months that Apple cuts its financial guidance because of challenges in China. Analysts currently watch closely to see if these production delays affect the widely expected launch of a new, lower-cost iPhone model this spring. In the meantime, Apple states it is doubling its financial donation to support the ongoing public health response to the crisis.