Apple shipped fewer than 500,000 iPhones in February, a 60% year-on-year decline

Apple got off to a great start in 2020. Chief Executive Tim Cook lauded the company’s “blockbuster quarter” for the three months that ended in December 2019, in which the company posted market beating earnings and revenue. The iPhone 11 series appeared to be doing well, especially in China, one of the company’s most critical markets.

On Jan. 29, a day after its earnings, Apple shares hit an intra-day high of $327.85, even after it gave wider-than-usual guidance for its March quarter. Investors felt content.

At that point, the number of coronavirus cases in China stood at over 7,000 versus more than 80,000 on Monday. In early February, analysts reiterated their buy ratings on Apple’s stock and strong price targets. While acknowledging the outbreak of the coronavirus, they felt Apple could withstand it.

On Feb. 17, Apple said it did not expect to meet the revenue guidance for the March quarter of $63 billion to $67 billion. China was mostly to blame. The coronavirus forced the annual Lunar New Year holiday to be extended. That meant Apple stores and the factories that make iPhones, run by Foxconn, remained shut for longer. Production wasn’t happening and demand had waned.

Even now, Taiwan’s Foxconn, the main company that assembles iPhones in China, is not at full capacity and not all of Apple’s retail stores in mainland China have opened. China accounts for nearly 15% of sales for the company but crucially, it is at the heart of iPhone production which will affect supply globally. The bad news kept rolling in. On Monday, official Chinese government figures showed Apple shipped fewer than 500,000 iPhones in February, a 60% year-on-year decline.

On top of that, there are concerns that Apple may not be able to launch new products on time, and that may include a rumored 5G-capable iPhone. Since the record intra-day high, Apple shares have fallen nearly 19% that’s wiped off billions of dollars in value, even as the broader equity markets saw a violent sell-off.

UBS lowered its June quarter iPhone unit sales by an estimated 2 million, to 38 million units. It also reduced its earnings and revenue estimates for Apple for the fiscal year ending September 2020. But analysts still feel that the coronavirus is a near-term issue for Apple and that its long-term growth story remains intact.

Apple got off to a strong start and looked unstoppable in 2020. Then the coronavirus broke out, CNBC, Mar 10