The China Academy of Information and Communications Technology today released data showing that smartphones shipments in China have fallen by 37% compared to January. According to Bloomberg, UBS analyst Timothy Arcuri expects the smartphone shipments to continue south after the Chinese government adds up this month’s deliveries. Arcuri wrote to UBS customers: “The numbers in February are probably much worse due to supply and demand problems related to the virus outbreak.” The outbreak he is talking about is of course the corona virus that continues to spread. “
Apple’s contract manufacturers in China, such as Foxconn and Wistron, close production lines and slowly reopen them. Apple has also closed all 42 of its Chinese store locations, although 29 of them are now open to business again. However, the stores that are open keep the lights on for only 8 hours a day instead of the 12 hours that the stores are open during normal times. Apple CEO Tim Cook recently told company employees that Apple Stores in the country “are starting to reopen, but we are experiencing a slower return to normal conditions than we expected.”
Apple increased its iPhone shipments in China in January by 5% on an annual basis
UBS ‘Arcuri also told customers that iPhone shipments in China fell 28% on a sequential basis last month. This is typical because the holiday season ends in January. But the note to the securities company customers pointed out that the month-to-month decline was “a larger decline than usual for that time of year.” Apple itself has confirmed that the coronavirus has affected its global iPhone operations because it has been unable to produce as many units as planned. The demand for the device in China has been hurt because all the attention in the country is focused on the virus. As we told you earlier today, sales of the iPad and other tablets are increasing in China. Employees are told not to come to the office and work from home. Children get their school lessons streamed on tablets.
The sale of Apple iPhones in China had been damaged by the closure of all 42 Apple Stores in the country
While Chinese iPhone deliveries fell 28% in January compared to the month before, annual sales of iPhones increased by 5% in the country from January of 2021 to January 2020. Remember that total shipments in China are in the same decreased by 37% over the period. Arcuri says the iPhone outperformed the competition in the largest smartphone market in the world because of its online stores. In addition, Apple had less to deal with trade war issues in January than in the same period last year.
When Apple published its tax revenue for the first quarter of 2021 at the end of January, it estimated fiscal revenue in the second quarter from $ 63 billion to $ 67 billion. Usually Apple gives a more accurate estimate, but mentioned the uncertainties about the influence of the corona virus on Apple for the greater range. However, a week ago, the company admitted that revenues for the three-month period that included January through March lagged behind the low of that range. The most damage occurs in China; outside of that market, Apple says that the sale of its products and services has met its expectations and has featured demand as “strong so far”.
But the truth is that as long as the disease continues to spread throughout the world, the global economy will slow. As we said, China is the world’s largest smartphone market (India is in second place), and when that region gets sick, it affects global industry worldwide. And if the stock market is an indicator of future events, the big hit that Apple has taken today (which fell 4.75% in regular trading on Monday) could be a sign that the corona virus has caused much more damage in the coming months.
Compsmag is supported by its audience. When you buy through links on our website, we may earn an affiliate commission fee. Learn more