Apple Lowers Revenue Guidance due to Coronavirus

Apple lowered its revenue guidance because of the coronavirus's impact on both production and sales in China, where most iPhones are made. Lynnette Luna, Principal Analyst at GlobalData, believes that it is not a reason to panic about the world’s supply of Apple products.

While China is home to much of Apple’s manufacturing, and Chinese consumers are big buyers of their products, the slowdown should be a temporary glitch for Apple. "Sales of Apple’s products remain strong outside of China, and this slowdown does not mean less demand for their products in China. It simply delays that demand to later in 2020. Moreover, Apple’s most recent quarterly results were strong. It can weather a temporary slowdown," Luna said.

She added that GlobalData doesn't expect Samsung to announce any impact of the coronavirus on its production, as about half of its manufacturing facilities reside in Vietnam. "It also has minimal exposure in China as the company already has a shaky position in the market  where local vendors such as Huawei, OPPO and Vivo are gaining ground with their full-featured smartphones at affordable prices. However, those vendors are facing strong headwinds from the coronavirus, and we will expect them to suffer more than Apple and Samsung in the first half of 2020“, Luna said.