Analysts at Wedbush Securities said Apple’s decision to temporarily close stores in China because of the new coronavirus outbreak could delay sales of up to 1 million iPhones, but is unlikely to have a material impact on apple revenue,media reported.
Analysts Daniel Ives and Strecker Backe wrote: “We believe that traffic in china’s major cities is currently restricted, if this continues into late February, Up to 1 million iPhones will likely move from the March sales season to the June sales season. “
Mr Ives and Mr Baker said the impact was likely to be negligible, since that figure was less than 3 per cent of china’s annual iPhone sales.
Apple said earlier in the day that it would close its stores in mainland China by February 9, out of “enough caution and on the latest advice of leading health experts.” Apple CEO Tim Cook attributed this to the uncertainty caused by the new coronavirus pneumonia. The company has a broad presence in the Chinese consumer market, where much of its manufacturing depends.
Ives and Baker wrote that the impact of the pneumonia outbreak on the company’s stock has eased as Apple has no large-scale sales plans for the January 25 Chinese New Year. “While the outbreak of the coronavirus is a worrying development for investors, we believe that the impact on Apple’s performance is fundamentally negligible, as Apple did not carry out promotional activities such as significant price cuts during the Spring Festival.” As we’ve seen over the past few years, such promotions generally stimulate sales in key areas. “
The company’s revenue for the quarter was $91.8 billion, beating its expectations. Nearly $56 billion in iPhone sales have largely boosted Apple’s earnings, even though the company has missed expectations in terms of earnings from its services business.
As of Saturday morning, nearly 12,000 cases of the new coronavirus had been reported worldwide, bringing the death toll to 259. Many foreign companies in China have suspended their operations in whole or in part and restricted their travel to the country.
U.S. President Donald Trump declared a public health emergency in the United States on Friday because of the new coronavirus.