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Coronavirus outbreak could derail Apple’s big plans for iPhone 9

Apple has already warned that it was unlikely to meet its March quarter sales forecast due to the coronavirus outbreak.

By: REUTERS
Updated on: Aug 20 2022, 19:31 IST
Apple may miss mass production schedule for new, cheaper iPhone (Bloomberg)
Apple may miss mass production schedule for new, cheaper iPhone (Bloomberg)

Apple Inc will likely miss its schedule for mass producing a more affordable iPhone that it had planned to release this spring, the Nikkei Asian Review reported on Tuesday.

Apple warned on Monday it was unlikely to meet its March quarter sales forecast due to the coronavirus outbreak.

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Mass production of the model was expected to start by the end of February, but it could now be delayed until sometime in March, the Nikkei reported, citing sources.

Also read: Looking for a smartphone? To check mobile finder click here.

The company had asked suppliers to ready up to 15 million units of the cheaper model for the first half of 2020, the Nikkei reported late last month.

Apple declined to comment on the Nikkei report.

Apple Inc.'s revenue warning linked to the virus outbreak in China is driving even more investors into government debt as a haven, with demand most pronounced in longer maturities.

Global yield curves flattened Tuesday -- the bond market's way of signaling mounting concern about the potential hit to world growth -- as share prices slid. In the U.S., the spread between 2- and 10-year Treasuries, at about 15 basis points Tuesday, shrank to the smallest since November, while the gap from 5 to 30 years touched 60 basis points, the skimpiest since December.

ALSO READ: Apple iPhone 9 to reportedly launch on March 31, sale date revealed as well

The move -- seen in Japan, Germany and the U.K. as well -- marks a shift from year-end, when the focus was on the prospect of stronger economic growth and steeper curves after the U.S. and China reached a trade deal and Brexit worries appeared to ease.

With U.S. curves flattening, "chatter that the recession is on again will surely begin making the rounds," BMO Capital Markets strategists Ian Lyngen, Jon Hill and Ben Jeffery wrote in a note Tuesday.

The recession risk as measured by the Treasury curve was rising even before this week.

The Federal Reserve Bank of New York's recession probability gauge, which uses the three-month to 10-year Treasury spread to predict the chance of a U.S. contraction in the next 12 months, rose in January for the first time since August. Back then, it reached the highest since 2008 amid the escalating trade war.

That timing also coincided with a global rally in bonds that drove the yield on 10-year Treasuries below those on two-year securities for the first time since before the financial crisis. That shift has historically been a reliable recession signal.

ALSO READ: Samsung set to benefit from China virus woes afflicting Apple, other rivals

The latest flight to safety has only added to a years-long shift into Treasuries by global investors, which, along with subdued inflation expectations, has driven down yields. Rates on the longest-dated U.S. Treasuries are now just shy of a record low of about 1.9% set in August.

The swing to flattening is evident across major sovereign markets. For example, in Europe, yields on 30-year German debt are just about 72 basis points above 5-year securities, down from a four-month-high above 80 basis points around a month ago.

(with inputs from Bloomberg)

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First Published Date: 19 Feb, 10:57 IST

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