According to Tim Cook, the current acting CEO of Apple, the company will begin to limit involvement with china by minimizing employee travel to China due to the coronavirus outbreak. Apple has even shut down one of its stores in mainland China and has limited the number of operating hours for other retail locations.
How coronavirus affects the industry
Coronavirus has slowly paralyzed certain sectors of the technology industry in both the manufacturing and even sales operations. A number of companies, which include Facebook and LG, have already reduced employee travel to critical business operations only. This makes for a lot of setbacks in the tech industry because without constant communication and a hundred percent involvement. The whole company would not be able to reach maximum efficiency, therefore slowly crippling them in certain sectors.
The effect of coronavirus on manufacturing timelines
Foxconn has been the leading supplier of Apple, and just recently, they have released a statement saying that the coronavirus has taken its toll on their manufacturing timelines. There have not been any reports so far supporting the idea that Apple's retailers were affected due to the outbreak or on Apple's adjustment measures on their manufacturing plans separately.
Factories in China are having a hard time dealing with the outbreak as well because not only is the outbreak heavily located in their country, but also the support from their buyers has also thinned as a precautionary method.
The formal announcement of Tim Cook
Investors of Apple were informed shortly after Apple's quarterly earnings release by Cook that they have already closed down a single retail store and that a significant number of channel partners have started to close down their storefronts as well. Apple stated that their sales in Wuhan, where it is agreed to be the origin of the virus, have dropped to an all-time low, and even the collective sales traffic across the whole country has been affected heavily.
This news came as a sad truth to investors, although it was already anticipated by most because this is a global health matter and not just a small hiccup to the whole company structure. Losing or minimizing involvement with China may heavily cripple their production and sales as they are already greatly invested in China.
The Lunar New Year holiday has been extended
Coming from the Chinese government themselves, the Lunar New Year holiday has been extended, and everybody is advised to stay inside their respective homes only going out when absolutely necessary. Although a sensitive matter, Apple has chosen to abide by the precautions and delayed the reopening of its production facilities until the end of this holiday extension.
The company's revenue projections are already expected to decline because of this issue, according to Cook. In addition, Apple has taken the initiative of providing care kits for its employees located in Wuhan and are regularly checking up on their temperatures and symptoms while heavily cleaning to improve sanitation.