Two industry analysts claim that Apple might lose billions of dollars in sales due to production delays in China. The country has been experiencing a manufacturing slowdown that could adversely and significantly affect the revenue estimates of the company.
Apple has been experiencing slow sales in China including a manufacturing slowdown. The supply chain disruption was estimated by experts to cost around four billion to seven billion USD in Apple's upcoming quarter estimates.
A statement released by the company alleged that it could no longer meet its prior revenue estimates that were set at 63 billion to 67 billion USD this quarter. However, the report claimed that China's setbacks to the company's production and sales line may not hurt Apple's revenues in the long run.
Analysts claimed that its consumers may refrain from buying new iPhone models until they would become available for purchase in the market. They then suggested that Apple should rethink its dependence on China for its manufacturing needs and iPhone assembly lines.
According to an expert on global business and professor at New York University's business school Joseph Foudy, the challenges that Apple faces doing business in China sets as an example for other companies. He suggested that they should diversify their markets to prevent further losses.
He also added that companies who have been operating in China have already been looking at expanding in other countries due to the trade tensions between China and the US. The said tensions were due to intellectual property concerns with Chinese firm Huawei.
Foudy claimed that the security issues regarding China were pegged as a reasonable excuse for foreign companies to increase their presence elsewhere and in regions such as Southeast Asia to reduce business risks.
The report further discussed that Apple may also shut down its factories in the country due to a lack of consumers who purchase its products. Apple claimed that its manufacturing partners such as Foxconn could no longer hit its peak production capacity after the Chinese government ordered a standstill on its manufacturing activities.
The official statement of Apple revealed that although its factories in Hubei province have been reopened, the business remains slow in the area. According to the market expert of Piper Sandler Michael Olson, his revenue expectations for the second quarter of 2020 for Apple is down at 65.3 to 58.6 billion USD. The said forecast was down by 20 percent from China and 10 percent on its iPhone products outside of China.
