Apple Temporarily Stopping Operations in China Amid Coronavirus Fears

Apple has announced a temporary shutdown of its operations in mainland China, in light of the Wuhan virus (Coronavirus) outbreak.  

In a statement about the outbreak, Apple said, “Our thoughts are with the people most immediately affected by the Coronavirus and with those working around the clock to study and contain it.”

So far, the virus has claimed 259 lives, in China alone, with several hundred more cases of infection reported in China. A similar trend of infections and complications appear to be growing in the United States, as well. 

As such, the statement goes on to say, “Out of an abundance of caution and based on the latest advice from leading health experts, we’re closing all our corporate offices, stores, and contact centers in mainland China through February 9. We will continue to closely monitor the situation and we look forward to reopening stores as soon as possible.”

Of course, this is important because the majority of Apple’s manufacturing takes place in China. Perhaps even more importantly, though, Apple consider mainland China a key market.  After all, Apple shipped 3.2 million iPhones throughout China in December, alone. This is up from 2.7 million units they reported shipping in the same month, the year prior (so an increase of roughly 20 percent).  That is certainly indicative of Apple’s regard for China being a key growth market, particularly at a time when lower-cost Android phones continue to thrive in the mobile industry. 

It is most unfortunate, however, that Apple also announced a record high, last week, with earnings and sales topping estimates, on Wednesday. Then again, there may not be a better time to announce such a cautionary hiatus then when things are going better than expected. As such, revenue was up 9 percent, to $91.8 billion, beating its own internal guidance.  Apparently much of this boost was due to better iPhone revenue, which is up 8 percent, so far, thanks to the sales strength of the new iPhoen models (to $55.6 billion).