Apple told the world earlier in February that the Coronavirus will take a toll on its sale and just like that, the company is having a big slump in demands of its iPhone supply. The Coronavirus pandemic had been ravaging the whole world causing billions to lock themselves indoor while disrupting businesses everywhere.
While the disease wasn’t a big deal as far back as February in the US, the far west country is now having almost 1 million confirmed cases of the Coronavirus pandemic which could increase the lock-down even further.
Medical authorities have confirmed at least 211,000 deaths and more than 3 million cases around the globe, according to data compiled by Johns Hopkins University & Medicine.
Apple by Thursday is expected to share the details of its fiscal second-quarter results which might be met with unexpected results by investors. Many companies have withdrawn any guidance they gave to Wall Street, merely saying they won’t meet whatever numbers they’d offered before.
Earlier on, Apple was expecting a tally sales of about $63 billion and $67 billion despite bad signs of the Coronavirus disrupting manufacturing and supplies throughout China back in December and early January.
But according to an Apple analyst, Toni Sacconaghi at AllianceBernstein noted that the numbers might not matter.
He added that he doesn’t have much conviction in forecasts, in part because “everyone knows that the fiscal second quarter results will not be good.” He also expects that “the worst is likely yet to come.”
Apple is one of the most valuable company in the world and the sales of its iPhone business was soaring in the past but the company will have to defend its stance as a result of the pandemic. Additionally, the $220 billion that Apple has in the bank makes it larger than the gross domestic product of many countries, including Greece, New Zealand and Panama.
Apple is known to have scaled through the previous recession but whether the coronavirus’s effect will further have a negative impact on the growth of the business as the year goes on and the coming year ahead is yet to be known. Analysts are always quick to using scaring words like “economic abyss,” “dark days ahead” and “dark valley.” to describe what the coming year might be for Apple.
Yahoo says analysts on average expect Apple to report profits of $2.28 per share from $54.7 billion in sales, a drop of more than 5% from the same time a year ago.
“The negative impact of COVID-19-driven global social distancing on the broader economy and several of our companies’ end markets has been severe,” wrote analysts at Goldman Sachs. The firm also downgraded Apple’s stock to “sell,” in part because it believes other analyst estimates are too optimistic.
Apple declined to comment ahead of its earnings.
5G TO THE RESCUE
Apple earlier on this year had released a number of devices such as the MacBook Air, iPad Pro, Magic Keyboard and of course the little iPhone SE which costs $399 but of course, there is still the up and coming iPhone 12 (we don’t know if that’s what it will be called) to be released later on by Fall of 2020 hopefully we’ve gotten the Coronavirus under our grips by then.
The iPhone SE (2020) according to analyst won’t save the company’s declining sales in China because the device lacks 5G technology. But new reports has it the next big iPhone will feature this technology which almost already well saturated in the smartphone industry with entry-level Android devices already featuring it.
While there is likely going to at least be a variant (probably with the 5G name affixed to the product’s name) we do not know when because rumors has it that manufacturing of the 2020 iPhone might be slowed due to supply shortages linked to the coronavirus pandemic.
One report in Nikkei, citing anonymous sources with “direct knowledge” of Apple’s internal discussions, said the phone may be delayed “by months.” The Wall Street Journal, meanwhile, said Monday its sources peg the delay at about a month.
But we might not be sure if the release of the 2020 iPhone will be delayed until we’re getting closer to the launch period of the device. And the supplies is also part of what will determine the production of the device.
The company’s CEO, Tim Cook will always praise the device and tell us how interesting and incredulous it is for the present and future so nothing big of a tip from the chief executive. But the Thursday fiscal breakdown will also be an opportunity for him to signal how one of the world’s biggest companies is navigating one of the worst health catastrophes in generations.
Morgan Stanley analyst Katy Huberty, for one, told investors in a memo last week that it’s likely Apple will figure out how to help make the iPhone 5G device a hit. “Apple took its medicine early,” she said.
But it’s not only Apple that’s been hit by effects of the pandemic as more smartphone companies such as Samsung all taking hit due to the slump in demands for smartphones in a record low-demand ever.