Coronavirus to hurt Apple’s supply chain, shipments in Q1, says analyst Kuo

Experts are of the view that Apple and other technology firms will bear the brunt of Coronavirus outbreak in China, which is also the hub of manufacturing for companies around the world. Analyst Ming-Chi Kuo has predicted Apple supply chain will take a big hit as he lowered his iPhone shipment forecast by 10% to 36-40 million in the first quarter of this year.

Kuo's revised estimate for Apple comes at a time when the company is gearing up to launch a new smartphone in the first quarter. Expected to launch in March, a lower-cost Apple iPhone SE 2 aka iPhone 9 is going to be an important phone for the company which is looking expand its base in emerging markets such as India.

Last week Gizchina reported that Apple supplier Foxconn has ensured the iPhone 9 launch goes uninterrupted as it has a "backup plan." It is worth noting that like many other firms Apple has also closed its corporate offices, stores, and other centers in China.

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Apple CEO Tim Cook during the company's earnings call said that the company was working to reduce the impact of Coronavirus.

"We do have some suppliers in the Wuhan area. All of the suppliers there are alternate sources and we're obviously working on mitigation plans to make up any expected production loss," Cook is quoted as saying. "We factored our best thinking in the guidance that we provided you. With respect to supply sources that are outside the Wuhan area, the impact is less clear at this time."

That said, Apple will not be alone in taking a hit from the Coronavirus outbreak. Kuo estimated that the Chinese smartphone market will see 50-60% decline in shipments year-over-year during the Chinese New Year holiday period.