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Coronavirus Is Not Good For Apple Business

enero 28, 2020

In recent days, the coronavirus has continued to spread faster and faster across China and beyond. According to several sources, this deadly new virus will also have an impact on Apple's business.

Foxconn coronavirus

First, the city of Wuhan in China, where the epidemic broke out, was quarantined. Public transport and commercial activities were closed, as were all offices and schools in the city. To date, the Chinese government has reported that the coronavirus has claimed 80 lives and thousands of infections.

For its part, Foxconn, Apple?s largest global partner, has ordered employees who are visiting Taiwan for Chinese New Year to extend their stay and not to return to the Wuhan factory. A factory as large and full of workers as the one Foxconn maintains in the quarantined city could quickly be overrun by a virus outbreak, potentially putting all workers at risk.

In the map below, you can see the location of the Foxconn factories in relation to the number of coronavirus infections (dark red represents more infections).

Foxconn coronavirus

Foxconn also stepped up health monitoring of employees at the Wuhan plant. The company has provided employees with masks to prevent the spread of the virus. In addition, employees are forced to check their body temperature every day, as fever is one of the first symptoms of the disease. Unfortunately, simply checking the temperature may not be enough. The infection can indeed occur several days before the appearance of the fever.

What is it about ?

Coronavirus 2019, called ?2019-nCoV?, causes breathing difficulties, flu accompanied by fever, cough and shortness of breath. In some cases, pneumonia develops. Other diseases caused by the coronavirus include severe acute respiratory syndrome (SARS) and MERS. Like most coronaviruses, it is believed that this virus has grown from a strain capable of infecting animals only to a strain capable of infecting humans also.

According to the CDC, 2019-nCoV was detected for the first time on December 8, 2019 in the city of Wuhan in China's Hubei Province, and then extended to other regions. In China, there have been nearly 2,800 confirmed cases and 80 deaths (data as of January 27)

Currently, this coronavirus is said to have a mortality rate of around four percent, significantly lower than that of SARS, which was 10 percent, and MERS, which had mortality rates of up to 35 percent. The problem is the rapid spread of this virus. Several cases have been reported in Europe, the United States and Africa. Between January 25 and 26, more than 400 new cases were confirmed. Contagion occurs through contact with saliva and mucus, even before the first symptoms appear. Infected people may not show symptoms until 14 days after exposure.

As with most respiratory illnesses, those most at risk are children under the age of three and adults over the age of 65. Most of the deceased were older and had health problems such as diabetes, hypertension and heart disease.

Apple

Apple has already announced that it will make several donations to help those affected by the coronavirus. What about Apple?s activities in China?

China is strategically and operationally the most important country for Apple after the United States. There are not only factories from many suppliers that produce components for the iPhone, iPad, Mac and other products, but also iCloud data centers and various Apple Stores.

Apple coronavirus

ICloud servers should not be affected by 2019-nCoV. These data centers, although large, have few staff. In addition, it only intervenes in the event of a problem. Data centers require less maintenance than a store.

The situation is different for Apple Stores which will experience a significant drop in their customers in the coming weeks. This translates into a drop in sales as the virus spreads. By the way, it was the boom period of shopping in China, when the Chinese New Year is celebrated.

Apple does not have Wuhan stores. In any case, the company has reduced store hours across China. According to several experts, the coronavirus could significantly slow down iPhone sales in a very important period for Apple. In addition, there could also be repercussions in the rest of the world, with less availability of iPhone, AirPods, iPad and all other Apple devices produced in China. Fewer available units also means fewer sales or, at the very least, longer wait times for customers.

What about the iPhone 2020? At this time, we don't know when the virus will be wiped out and when this crisis will end, but we do know Apple's schedule. The company begins manufacturing the devices 60 days before the launch of the Mac or iPad and 3-4 months before the launch of an iPhone. The next iPhone will launch in late September, so production is expected to start in May-June. If during this period there were still epidemics of active viruses, production could be subject to serious delays, with the consequence that the launch of the new iPhones could be postponed.

For the iPad expected in March-April, and the iPhone 9 in late March, there could indeed be serious delays. If so, then stocks could be very thin at the time of launch.

However, the impact of the coronavirus will be felt to a greater or lesser extent for almost all technology companies. The hope is that everything will be resolved in the shortest possible time to avoid further death and suffering.