Tech giant Apple said this week that it does not expect to meet its second-quarter revenue forecast due to global supply shortages caused by the Chinese coronavirus.
Apple no longer expects to meet meet its quarterly revenue forecast due to the coronavirus, which has apparently resulted in a lower worldwide iPhone supply, as well as a lower demand in China, according to a report by CNBC.
The tech company says that it does “not expect to meet the revenue guidance” it provided “due to two main factors.” Both cited factors stem from the coronavirus outbreak.
“The first is that worldwide iPhone supply will be temporarily constrained,” said Apple in a statement. “The second is that demand for our products within China has been affected.”
Apple, which makes most of its iPhones in China, had initially expected to garner between $63 billion to $67 billion in net sales of revenue for its fiscal second quarter.
The company added that its initial revenue forecast from January had a $4 billion discrepancy in range due to concerns of unpredictability involving the coronavirus.
“As you can see, the range anticipates some level of issue there. Otherwise, we would not have a $4 billion range,” said Apple CEO Tim Cook at the time, according to CNBC.
Now, Apple warns that production delays due to the coronavirus will cause the company to take a bigger than anticipated financial hit, but has not yet specified by how much.
The tech giant had temporarily ceased production in China, and closed its retail stores in the country.
Some of its stores in China have reportedly since been reopened, but Apple noted that it is nonetheless, experiencing slower than usual conditions following the extended Chinese holiday.
“Stores that are open have been operating at reduced hours and with very low customer traffic,” said Apple. “We are gradually reopening our retail stores and will continue to do so as steadily and safely as we can.”
Apple added that while its iPhone manufacturing facilities have reopened in China, the company still doesn’t expect it to remedy global supply shortages, as the facilities “are ramping up more slowly than we had anticipated.”
“Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated,” said Apple.
“These iPhone supply shortages will temporarily affect revenues worldwide,” the company added.