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Apple, iPhone suppliers tumble on coronavirus warning

Video Credit: Reuters Studio - Duration: 02:09s - Published < > Embed
Apple, iPhone suppliers tumble on coronavirus warning

Apple, iPhone suppliers tumble on coronavirus warning

Shares of Apple and members of the iPhone supply chain fell on Tuesday after the technology giant issued the loudest warning yet on the financial fallout from the coronavirus.

Conway G.

Gittens has the details.

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Apple, iPhone suppliers tumble on coronavirus warning

When Apple sneezes - the entire tech supply chain catches a cold.

The world's largest tech company lost roughly 30 billion in market value Tuesday after warning it could no longer stand by its first-quarter sales forecast because of a double-whammy to the iPhone from the coronavirus.

Hit number one: Chinese manufacturing operations are still hobbled by millions of workers ordered to remain at home - impacting Apple's supply chain.

Hit number two: some of Apple's retail stores are either shut or operating at reduced hours.

The country is slowly emerging from the lockdown in effect since late January.

But even in Shanghai, which is hundreds of miles away from Wuhan the epicenter of the outbreak, life and business is far from normal.

SOUNDBITE (MANDARIN): WAYNE ZHANG, 32-YEAR-OLD SHANGHAI RESIDENT, SAYING: "Probably still needs some time.

Actually everyone is still feeling nervous..

Looking at the people on the street and friends around me, some people still cover themselves up securely.

I think the situation is still quite intense.

It will take time to go back to normal." Analysts predict Chinese demand for smartphones will be cut in half during the first quarter.

And with factories disrupted in Apple's main manufacturing hub that means fewer iPhones for everyone else.

Apple's dependence on Chinese partners to make and ship iPhones is undeniable.

The company that assembles the device - contract manufacturer Foxconn went to 29 locations in China last year up from 19 in 2015.

But there's more than Chinese companies in Apple's supply chain: - with fewer iPhones being put together that's likely to lead to a glut in components made by suppliers such as Samsung Electronics, Taiwan Semiconductor, SK Hynix, and Qualcomm.

All of those stocks moved lower Tuesday as the Apple warning rippled through the sector.

Some analysts hope sales and manufacturing will quickly bounce back but some investors weren't so confident - Apple shares were down roughly 3 percent in Tuesday trade.



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