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Apple iPhone shipment likely to take a 10 percent hit owing to Coronavirus

Noted Apple analyst Ming-Chi Kuo opined iPhone shipment might be hit owing to the Coronavirus outbreak which has already been declared a Public Health Emergency of International Concern by the World Health Organization.

According to Kuo, iPhone shipments might be lower by 10 percent, leading to 36 – 40 million of the Apple smartphone getting shipped during Q1, 2020. One of the reasons Kuo cited is the vast reduction in demand for smartphones in China itself, with the market shrinking by a massive 50 – 60 percent at a time when the country is celebrating its New Year.

Movements within China has been restricted with the government there announcing an extended holiday till Feb. 9 for the New Year to encourage people to remain in-house. Flights to and from China has also largely been suspended with most companies including Apple suspending their authorities from travelling to the country until it is extremely essential.

Another reason Kuo believes will be stunting growth is the lower replacement demand for 5G phones. This together with the outbreak of Coronavirus which has impacted the normal functioning of day-to-day lives in China will lead to lower demand for smartphones in general.

Foxconn, however, chose to put up a brave front claiming their schedules are remaining the same and hence production is going to remain unchanged. The company which has plants all over China, including one in Wuhan – the epicentre of the Coronavirus outbreak – said they have put in place a strict health screening procedure for its workers to prevent the spread of the disease.

The company also refuted rumors of production of the upcoming iPhone SE 2 being hit by the recent health scare. Earlier rumors had claimed Apple initiating production of the iPhone SE 2 in February ahead of its intended launch in March.

Analysts, however, believe Apple might still go ahead with its launch plans in March with fewer iPhone SE 2 devices on hand and hope for production to pick up once the Coronavirus scare stables out.