Apple’s Business In China Continues To Struggle Amid Coronavirus Outbreak

Apple's business in China has been affected by the current 2019 Novel Coronavirus outbreak. The Cupertino tech giant is currently working on mitigating the negative impacts that the virus brings to its business.

Apple Insider reported that as per Apple's Chinese website, the Cupertino tech giant has already closed three of its stores in areas affected by the 2019 nCoV outbreak. Two of these branches – Apple Wonder City in Nanjing and Apple Tahoe Plaza in Fuzhou – are closed until Feb. 2. The iPhone maker also decided to shut Apple Qingdao Vientiane City in Qingdao for safety reasons.

Apple CEO Tim Cook added, in an interview with CNBC, that aside from shutting stores and cutting back on retail store hours to help reduce the spread of the virus, the company has also restricted employee travel to the Asian country and has limited it “to business critical travel.”

Serious case

The 2019 nCoV outbreak continues to worsen as the days go by, and is affecting lives and businesses in China. Statistics show that as of writing time there are more than 7,800 cases in China, and 170 people have already died from the virus infection. Yet, despite the increasing number of cases and deaths, Apple continues to find ways to sustain its business in the Asian country.

“We have alternate sourcing and contingency plans,” Cook told investors during a conference call Tuesday. “Factories outside Wuhan are less clear. We are trying to factor in factory re-opening delays into our guidance.” The CEO added that some of the company's manufacturing facilities will remain closed until Feb. 10, according to the recommendations given by the Chinese government.

Apple also set an unusually large guidance range for Q2 2020, between $63 billion and $67. The company CEO said the $4 billion range reflects the outbreak and the “uncertainty around that.” This range will allow the company to have some cushion in the event that its business will be heavily affected by the current spread of the virus.

Cupertino has several plants producing its devices, most notably the iPhone, in China. Foxconn, Apple's manufacturing partner, is already working on keeping its workers safe from the outbreak and has warned them to avoid returning to the Wuhan plant, which is located in the city where the outbreak started.