60% decrease in iPhone supply in China in February 2020 due to concerns about Corona
Before this, research institutes such as IDC and Canalys had predicted that with the spread of the corona virus and as a result of the downward trend in demand and disruption in the supply chain, the amount of smartphone supply in the world during the first quarter of 2020 with about face a 40% reduction. As you know, with the unexpected spread of this virus, China imposed travel restrictions for its citizens from the end of January and at the same time as the beginning of the Chinese Lunar New Year in this country and asked people to avoid attending Avoid public places. These restrictions mainly continued almost throughout the month of February.
According to the China Academy of Information and Communications Technology (CAICT), manufacturers sold a total of 6.34 million smartphones in China in February, compared with 14 million units sold in the same period last year. The past shows a 54.7% decrease. In a situation where Apple’s performance last month was estimated to be much lower than expected, Chinese companies did not fare better either. Meanwhile Huawei and Xiaomi have experienced the biggest drop and according to reports, they shipped a total of 5.85 million units of smartphones in February. the market of the country of origin; A figure that shows a significant decrease compared to 12.72 million devices released in February 2019. From the point of view of the Chinese Academy of Information and Communication Technology, the closing of several factories in this country and the restriction of travel and staying at home of citizens of this country can be counted among the main factors of the decline. The reported February supply figure is the lowest since 2012, when the China Academy of Information Technology (CAICT) began publishing supply and sales figures.
On the other hand, Apple’s share in the Wall Street stock market has decreased by about 6% due to growing concerns about the economic crisis caused by the drop in oil prices and the rapid spread of the Corona virus. From the point of view of one of the analysts of the investment and financing company Wedbush, although we are going through a time full of tension and worry, we are aware that the decrease in demand during the quarter leading to March in China is not a continuous trend; Rather, it is a shocking event that will last for a short time.
Tim Cook, CEO of Apple, in this regard, warned the company’s investors in an open letter that they may not be able to meet the initial revenue forecast for the first quarter of this year and attributed this to weak demand, especially in the Chinese market. It should be mentioned that with the increase in fear caused by the corona virus epidemic, Apple stores in China were closed for nearly two weeks, which has led to a significant decrease in retail sales of the American company in this country. This downward trend in sales has also spread to operators and other components of the retail chain, so that they have closed their stores or drastically reduced working hours.
While many stores have reopened since the beginning of March, it is not yet clear whether Apple’s sales will return to normal levels. In fact, even if the demand in China returns to the previous routine, now similar methods have been used to deal with the corona virus in other countries, such as Italy, and the effects of these policies at the world level will naturally affect Apple production. Obviously, without sales, there will be no money, and that means a financial loss for Apple shareholders. But in the end, Apple’s financial results in the first quarter of 2020, which will be published in April, can be an accurate measure to judge in this regard.