KEY POINTS

  • Apple temporarily shuts down 42 stores in China due to coronavirus outbreak
  • It includes contact centers, stores, and corporate offices
  • Analysts believe the move could delay Apple's 1 million iPhone sales

As of the latest update, coronavirus has killed 259 and infected at least 12,000 people. The Cupertino tech juggernaut Apple temporarily ordered the shutdown of its 42 stores in China because of the lethal virus outbreak. Analysts believe that Apple’s latest move could less likely cause a significant impact on the company’s revenue, but it could delay1 million iPhone sales.

Apple Closing 42 Stores in China

New walls more fortified than the Great Wall of China are now emerging as the country resolves coronavirus and its increasing death count. On Monday, the Shanghai government ordered companies to close down and resume operations on Feb. 9 as it fortifies its control and prevention of coronavirus. Apple joined other companies and said on its official website that it's closing its stores and would resume operations in China on Feb. 9.

According to the Cupertino tech giant, the decision was based on the latest advice of health experts and to observe caution. The temporary shutdown includes contact centers, corporate offices, and stores in mainland China. The company will continuously keep track of the situation in China and hopes to reopen stores as soon as possible, Apple told CNN.

The iPhone 11 helped Apple regain the crown as leader of the global smartphone market in the fourth quarter, according to analysts
The iPhone 11 helped Apple regain the crown as leader of the global smartphone market in the fourth quarter, according to analysts AFP / NICOLAS ASFOURI

Coronavirus Impact on Apple

Analysts at Wedbush Securities said on Saturday that Apple’s decision could delay 1 million iPhone sales. However, the figures only represent less than 3 percent of the yearly iPhone sales in China, which, according to analysts, is minimal. In its recent report, Strecker Backe and Daniel Ives note that at least ~1 mm iPhones in the country could potentially suffer from shifting out into June instead of March should the outbreak continues until late Feb.

Analysts cite various factors for this possible iPhone sales delay. It includes the scarcity of transportation in major cities in China. Limited foot traffic in most cities, including Beijing and Shanghai, could also play a crucial role in the delay of iPhone sales. The effect of the coronavirus outbreak on Apple’s shares was lessened because the company ‘did not roll out major sales around the Chinese New Year,’ according to analysts.

Apple relies on China for most of its manufacturing and has massive exposure to the Chinese market. Other US companies with footprints in the Asian country have also shut down operations temporarily because of the coronavirus outbreak.