Apple may have to rely on its services more than iPhone sales as coronavirus spreads.
This article is part of a series tracking the effects of the COVID-19 pandemic on major businesses, and will be updated. It was originally published on April 6.On the supply side, some factories in Apple’s AAPL, +8.72% Asian supply chain remained closed beyond the typical Lunar New Year holiday as the coronavirus spread across China. That included factories that assemble iPhones, Apple’s biggest moneymaker, which hurt Apple’s ability to stock up on the devices.
There are similar questions for most of Apple’s other business units — such as iPads, Mac computers and even headphones — but the company’s services division should be fine. With many people staying at home, offerings like the App Store, Apple Music, and new gaming and video services could find more people willing to pay the comparatively lower prices for entertainment to enjoy on their Apple devices.
Earnings: Analysts modeled $2.45 in March-quarter earnings per share at the end of the first quarter, down from an estimate of $2.71 at the end of February and $2.99 at the end of January. For the full fiscal year, analysts were projecting $12.83 a share at the end of the first quarter, down from $13.80 at the end of January.
March 13: Apple announced that it would be temporarily shutting stores while admitting that the situation in general remains fluid. “We do not yet know with certainty when the greatest risk will be behind us,” the company disclosed. What analysts are saying • “From a supply perspective, we continue to see net-positive indications from China – e.g., Foxconn reporting ramping labor capacity resumption faster than expected.” — Wells Fargo analyst Aaron Rakers, in upgrading Apple’s stock to overweight with a $315 price target on March 13.
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