Apple’s outlook cut revives questions about China over-reliance

Existing iPhone inventories at retailers will soften the immediate blow of slower manufacturing, but analysts anticipate worldwide shortages will follow, extending the impact of the present disruption. — Bloomberg

For the second time in as many years, Apple Inc has had to temper its sales outlook because of unexpected shifts in China, the country that’s served as the engine of its growth and success. First a trade war with the US and now the outbreak of a novel coronavirus have called into question China’s role as a reliable market and supply chain partner for the world’s most valuable maker of consumer electronics.

The coronavirus that’s stifled China’s meticulously orchestrated production and logistics has hit both Apple’s supply and demand – factories are resuming work slower than expected, the company announced, and most of its 42 stores in the country lie dormant – illustrating how heavily exposed its business is to disruptions in the world’s most populous country. A fall in sales within China is likely to be the most immediate impact this quarter, while widespread production bottlenecks there risk hurting global iPhone revenue in subsequent months.