Analysis of how badly Apple can be influenced by the Coronavirus

7 Mar

Analysis of how badly Apple can be influenced by the Coronavirus

In mainland China, all of the stores of Apple have been shut down temporarily over the weekend. A huge decline in sales has been reported by the decision analysts in the main market for the technology giant while the entire nation is fighting the epidemic of the coronavirus. The stores of Apple are announced to be closed till 9th February. It also has been estimated as one of the worst-case situations of the company, where Chinese sales have gone done to zero.

Each week of no sales in China results in a decrease of -1.3% or a sales of 850 million dollars. It has been expected that if this scenario continues for a month then a decrease of -5.2% of total sales of Apple or loss of 3.4 billion dollars will result. A few days back, there was indeed a slight increase in Apple shares, yet still, the broader market was underperformed on these concerns. Although it was declared by Apple that its online stores will remain open. However, delays in deliveries are expected. It was also noted that China’s stores of Apple have an important influence on its total sales. Around 17% of the total sales of Apple is made by the country, while just 8% of the stores of Apple are located in China.

It was also noted that exposure of heavy sales was experienced by Apply in China, as well as its huge supply chain and manufacturing in the country. Around half of the vendors of Apple are in China. For the 1st quarter of this year, the shipment forecast of the iPhone has been reduced by 10%, particularly referred to as the coronavirus. It also has been indicted by the latest survey that the supply of Apply is being influenced by the coronavirus. Thereby the forecasts of its shipment have been cut down.