Apple today announced that it doesn't expect to meet the quarterly revenue guidance it shared on January 28 because of the ongoing Coronavirus outbreak.
The company said that work has resumed in China, which is where most of its products are made, but it's "experiencing a slower return to normal conditions" than anticipated. This has led to a supply problem, especially with the latest iPhones, and that's a problem because the iPhone makes up the vast majority of Apple's revenue.
Apple didn't provide any details about how iPhone production has been affected by the Coronavirus outbreak or when the issue should be resolved. The company said:
"While our iPhone manufacturing partner sites are located outside the Hubei province — and while all of these facilities have reopened — they are ramping up more slowly than we had anticipated. The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues. These iPhone supply shortages will temporarily affect revenues worldwide. "
Unfortunately for Apple this isn't just a supply problem. The company said the Coronavirus outbreak has also led to lower-than-expected demand for its latest iPhones, too, which means it won't make as much money in one of its most lucrative markets as it previously anticipated. As the company explained in today's update:
"All of our stores in China and many of our partner stores have been closed. Additionally, stores that are open have been operating at reduced hours and with very low customer traffic. We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can. Our corporate offices and contact centers in China are open, and our online stores have remained open throughout."
This meshes with reports about how other companies (and entire product categories) are faring in China right now. Supplies of game consoles, smartphones and other products are expected to be tight because of the outbreak. Demand for motherboards and graphics cards within China is also said to be down.
Apple said it plans to offer more information about the situation, which "is evolving" as the Coronavirus outbreak's effects continue to be felt, during its April earnings call. It also said that it's "more than doubling [its] previously announced donation to support this historic public health effort" to manage the viral outbreak.