Coronavirus: Apple loses trillion-dollar valuation post market crash; China supply chains hit
Apple says it might miss its revenue forecast for the March quarter with retail stores shut and consumer demand falling due to the coronavirus scare.
The global stock market crash induced by the coronavirus outbreak has spared none.
Cupertino-based tech giant Apple lost its trillion-dollar valuation this week, with shares tanking nearly five percent in a day.
Given the iPhone-maker's enormous valuation, even small fluctuations end up eroding several billions of dollars off its market cap. Apple is now worth $960 billion, which leaves only Microsoft ($1.03 trillion) in the coveted 13-digit valuation bracket.
Since the start of the year, Apple shares have fallen 20 percent on the NYSE.
Apple CEO Tim Cook | Image: Flickr
Apple has also suffered after its supply chains were badly hit in China, where the coronavirus outbreak began. Last month, the company hinted that it might miss its revenue forecast for the March quarter.
Apple said in a statement,
"We are experiencing a slower return to normal conditions than we had anticipated. As a result, we do not expect to meet the revenue guidance we provided for the March quarter."
The iPhone-maker had earlier predicted revenues of $67 billion (up from from $63 billion in the December quarter) by the end of March 31, 2020.
Apple said that its iPhone supply chains were "constrained" in China with the closure of manufacturing units. Consumer demand has also fallen sharply with the shuttering of retail stores across the US and Europe.
Apple Inc
Interestingly, Apple was slated to launch its India online store in January, and later set up its first physical store in Mumbai in 2020.
Both have reportedly been postponed to the middle of the year or even later to coincide with CEO Tim Cook's India visit and precede the launch of new Apple devices. Given the current scenario, with the world caught up in a huge public health crisis, the store opening could even be delayed till 2021.
In India, Apple's market share is negligible, but it was one of the fastest-growing smartphone brands in the last quarter (Q4 2019), according to Counterpoint Research.
This growth was driven by price cuts on the iPhone XR, made possible by local manufacturing, a faster rollout of the new iPhone 11 series, and a stronger channel strategy adopted by Apple.
But only time will tell how the coronavirus crisis would impact new sales.
(Edited by Kanishk Singh)