Apple warns revenue will be lower than expected because of coronavirus impact

In a rare investor update on Monday Apple said the global effects of the coronavirus outbreak are having have a material impact on the company bottom line. The company does not expect to meet its own revenue guidance for the second quarter due to the impact of the virus, and warns that worldwide iPhone supply will be temporarily constrained. Store closures and reduced retail traffic in China are also expected to have a significant impact.

Apple warns revenue will be lower than expected because of coronavirus impact

All of Apple’s iPhone manufacturing partner sites have been reopened but are ramping up more slowly than we had anticipated which means that fewer iPhones than expected will be manufactured. As a result these iPhone supply shortages will temporarily affect revenues worldwide says Apple.

Regarding Apple retail presence in China the company said that it is gradually reopening our retail stores and will continue to do so as steadily and safely as we can. The company says its corporate offices and contact centers in China are open.

Cook echoed those sentiments in a memo sent to Apple staff, which was obtained by Bloomberg. I want to thank everyone for their dedication empathy understanding and care Cook wrote. Our paramount concern is with the people who make up Apple’s community of employees partners customers and suppliers in China.

In its latest earnings call at the end of January Apple CEO Tim Cook said that Apple already had a wider-than-usual revenue range for the second quarter due to uncertainty around coronavirus. Still it appears that revenue range wasn’t wide enough to account for the growing impact of the public health emergency.

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