As you can imagine, the coronavirus in China would not be without effect on the production of new Apple products. Indeed, this has great risks for Apple. Analyst Ming-Chi Kuo has five.
Risk 1: confidence of Chinese and global consumers
Kuo expects an overall drop in smartphone sales on the Chinese market and also worldwide. As a result, sales of Apple products will likely face a decline, as consumer confidence in Chinese and global markets could be adversely affected by the coronavirus epidemic.
Risk 2: production of new products in the first half
Production of new Apple products in the first half of 2020 will be threatened due to the labor shortage. The factories of Foxconn (the supplier that assembles Apple products in China) are located in high-spread areas; there will be a resumption of work later than expected in China. The image below shows it.
Risk 3: qu product certification and certification (tests)
“The worst scenario for Apple is to postpone the qualification and mass production schedules for new products to the second quarter of 2020”said Kuo. ” If there are no significant improvements to the coronavirus outbreak in the near future, Apple may delay or reduce the testing requirements for the components in order to shorten the qualification process and launch new products on the second. semester of 2020 “, continues the analyst.
Risk 4: impact on the products to be launched in 2021
“If there are no improvements, it will affect the business travel plans of Apple employees (executives, engineers, designers) in China, which would have an impact on the development schedules of Apple for new products coming out in the first half of 2021 “said Kuo.
Risk 5: the ex user experience with Face ID
The Chinese use masks to cover their mouth as well as their nose, thus the infrared projector of Face ID cannot penetrate the protective mask.
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