Heavily reliant on China, Apple’s supply chain will likely at least a month to get back to full capacity due to disruptions caused by the coronavirus, Wedbush analyst Daniel Ives says.
Jeran Wittenstein for Bloomberg:
Even in a best-case scenario, the iPhone maker’s supply chain won’t be fully functional until early April as workers at Apple’s manufacturing partners return to work in China, Ives wrote in a research note. The disruptions could last until as late as June in a worst case scenario that would probably delay Apple’s fall iPhone release by months, he said.
If Apple’s supply chain gets back to normal by April, the company’s lower priced iPhone may be delayed by several weeks in the spring, but the 5G iPhone release in the fall would probably be unaffected, said Ives, who has an outperform rating on the stock.
MacDailyNews Take: Apple will weather the coronavirus impact and, perhaps, better diversify production, learning some important lessons from their current state of over-reliance on China. The company will come out of this stronger than ever; which is bad, bad news for Apple’s so-called rivals!
I think it might take more than one month. That is a petty rosy assessment. I’d say this will affect the global supply chain for years, even when the virus (if) is eridacted. And isn’t looking good right now.
I got out of Apple at $325 and waiting for a bigger drop before loading up again. This could take months to resolve.
I agree the the comments above. Even if things are “stabilizing” in China (and who knows if it is or isn’t), now Korea is exploding. That means… supply issues from Samsung. The virus is slowly picking up steam around the world. I would expect there to be supply, production, logistic and shipping delays. I would expect there to be pockets of low demand as people’s spending shifts towards essential items only. I live in Taiwan and we have already seen at least two temporary factory/ company closures. I’m sure there will be more here (and in other countries) in the future.
Dreamy estimate, imo. The largest manufacturer in the world is being shut down in many sectors! This means goods normally sent throughout the world aren’t shipping and China loses the income. (They had the 1st GDP no-growth in 30 years, this past yr). Hundreds of thousands of workers (just Foxconn alone) aren’t working, or are working much less…again, stifling China’s needed cash flow. Many of China’s small businesses are getting knee-capped and the Chinese banks can’t, or won’t lend to get them over the hump. Some press has noted these losses (closings) will be huge.
The US econ is based on consuming, so, it’s a very symbiotic reality being played out. What pain we are seeing today is the front end of the problem…even if the virus was to be quashed in the near term. The ripples are broad and deep and it will take quite awhile for the waters to find normalcy.
Q220 and we’re back to normal? I’d say the effects will be felt through ‘20.