Over the past few years, China has become one of the most important markets for Apple. In 2015, China surpassed the US and became the biggest iPhone market. However, the recent outbreak of Coronavirus in China might affect the sales of the company in the region. According to CEO Tim Cook:
While our sales within the Wuhan area itself are small, retail traffic has also been impacted outside of this area across the country in the last few days.
Cook claims that the company is taking precautions to keep its staff and customers safe. Apple has closed a store in China due to the emerging virus; many retailers have also shut their stores down for the time being. Meanwhile, other stores have reduced the operating hours.
The CEO has also asserted that all the stores in China have been ordered to deep clean the stores frequently and conduct regular temperature checks of retail workers to make sure they remain healthy. According to Cook:
The situation is emerging, and we’re still gathering lots of data points and monitoring it very closely. Many of the stores that remain open have also reduced operating hours.
The Cupertino has suppliers in the Wuhan region. However, the iPhone maker has other sources for the components and is working on mitigation plans to cope with the production loss. Since the Chinese government extended the New Year holiday break from the end of January to February 10. Which will result in a delay when it comes to the startup of Apple factories.
Apple has factored that the possible supplier and retail traffic impact to its revenue for the March quarter is expected to be between $63 billion to $67 billion.