The coronavirus shook the world with multiple deaths, personal losses, and at the same time it has affected various businesses as well. The Silicon Valley has also been affected as many tech companies have their various operations run out of China.
Apple has reported that its financial predictions will have to be toned down as a result of the unexpected spread of coronavirus which has affected its stores and manufacturing plants in China. The company relies on Foxconn Technology Group to have its iPhones, iPads, Macs, and more to be assembled.
Foxconn has reported that it expects its annual revenue to be affected from the outbreak of coronavirus. Foxconn is a global player with its manufacturing and assembly plants set in different parts of the world. However, its main centers are located in China as parts and labour are cheaper in the country.
“As we are moving ahead with the reopening of mainland China manufacturing complexes in a relatively cautious manner, this will indeed have a negative impact on full-year revenues,” said Hon Hai, Foxconn group’s Taipei-listed flagship company, on Thursday in a statement to the Taiwan Stock Exchange.
However, analysts studying the effect coronavirus will have on businesses suggest that the “disruption” will only be temporary. According to Credit Suisse, the sales of the iPhone in the first quarter of 2020 could be 50% lower compared to the fourth quarter of 2019. However, there are some seasonal changes to be taken into consideration and not just the coronavirus outbreak.
“This just measures the ratio of workers’ return,” said chief executive of Foxconn, Jason Chen. “There may be other variables. Even if the production gets back up, you may hit transport and logistics bottlenecks, or shortages, for example of packaging materials.”
Foxconn has been extremely careful in regards to reopening its manufacturing plants.