Tripp Mickle reports the troubles faced by Apple in China as a result of the outbreak of the coronavirus. He writes:
Coronavirus has given new meaning to something Apple Inc. executives have been saying for years: Apple needs another China.
The rapid spread of the virus and the disruption it has caused is the latest test of Apple’s dependency on the world’s most populous nation, both as a consumer market but more fundamentally as a manufacturing base for most of the iPhones, iPads and Macs sold world-wide.
The outbreak prompted China to keep many factories closed after the Lunar New Year holiday that ended last weekend. Apple and Foxconn Technology Co., the largest manufacturer of Apple devices, have said production will resume after a 10-day delay on Feb. 10. But signs are emerging that the impact on the companies will extend beyond the shutdown, according to analysts and manufacturing executives. For the current quarter, Apple is expected to ship 5% to 10% fewer iPhones than was projected prior to the outbreak, according to analysts.
An Apple spokeswoman declined to comment further.
Confirmed coronavirus cases have passed 28,000 and deaths have risen to more than 560, all but two in China. That exceeds the 349 who died in mainland China during the SARS crisis of 2002 and 2003. The country continues to take aggressive measures to contain the outbreak, all of which complicate global companies’ efforts to keep production flowing.
The uncertainty has disrupted China’s economy. To curtail the virus’s spread, some local governments have asked people to stay away from work. In some areas, only one person per household is allowed to go out every two days to buy food and supplies.
Chief Executive Tim Cook has successfully weathered a number of challenges involving China in recent years.
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