Over 10% drop in iPhone shipments due to Coronavirus

The rapid spread of the novel coronavirus may adversely affect Apple’s supply chain, leading to a 10 per cent drop in iPhone shipments in the first quarter of 2020, according to a forecast by top Apple analyst Ming-Chi Kuo.

In a note to investors, Kuo’s firm TF international Securities said it is still not clear if the coronavirus impact will hurt iPhone shipments in the second quarter of this year.

“Our latest survey indicates that the iPhone supply is being affected by the coronavirus and, therefore, we cut the iPhone shipment forecasts by 10 per cent to 36-40 mn units in 1Q20,” Kuo said in the note on Monday.

While there is no official announcement on iPhone shipments, Kuo estimates that Apple shipped about 38 million during the first quarter of 2019.

“It’s difficult to predict the shipments in 2Q2020 because of the uncertainties of the coronavirus epidemic and consumer confidence,” Kuo said.

The coronavirus which originated in China’s Wuhan area has already led to the death of over 425 people.

While a large number of iPhones and iPads are assembled in China’s Shenzhen and Hengyang, many of these products are shipped from Wuhan, and due to the various restraints on travel there, shipments of the devices could get affected, USA today reported on Monday.

The iPhone maker earlier announced that it would shut all its stores and offices in mainland China till February 9.

Fuelled by strong demand for iPhone 11 series, wearables and services, Apple last week posted an all-time record for quarterly revenue at $91.8 billion, an increase of 9 per cent from the year-ago quarter.

International sales accounted for 61 per cent of the revenue for its fiscal 2020 first quarter that ended on December 28, 2019. Apple registered double-digit growth for iPhones in mainland China in its fiscal 2020 first quarter.