Apple to face challenges in increasing iPhone production amidst the Coronavirus outbreak in China

on Jan 28, 2020
Updated: Mar 11, 2020
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  • Apple to face challenges in increasing iPhone production amidst the Coronavirus outbreak in China.
  • Apple had planned to increase iPhone production by 10% in the first half of 2020.
  • Apple says it has received 15 million orders for its upcoming budget variant for iPhone and another 65 million for older devices.
  • Apple gained 86% in the stock market in 2019 versus 29% in S&P 500 index.
  • Apple to announce its performance results for the first quarter on Tuesday after market close.

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Apple had previously announced its plans of increasing iPhone production by 10% in 2020’s first half. According to Nikkei Asian Review, the American tech giant is now faced with a major challenge to keep in line with the plan as China comes under a coronavirus outbreak that is spreading quickly across the country.

The majority of Apple’s suppliers have their manufacturing units in China. As per the sources, the smartphone manufacturer has now implored its manufacturing partners to ensure at least 80 million iPhones in the production in 2020’s first six months.

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Apple Says It Has Received 15 Million Orders For Its Upcoming Cut-Price Model

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The report further highlighted Apple to have already received 15 million orders for its upcoming cut-price model to be launched in March. Another 65 million orders, the company claimed, are booked for its older devices.

With the concerns of the coronavirus outbreak and its containment being a nationwide priority in China, iPhone’s mass production is now expected to be postponed. Apple had previously planned to begin the mass production somewhere in the mid of February.

The recent statistics highlighted as many as 4,500 people in China that have acquired the virus with over 100 of the victims already having lost their lives. In the past few weeks, the outbreak has weighed heavily on the global financial markets. As per the analysts, its impact on the markets is likely to be stretched further as long as the virus is pending eradication.

Apple Gained 86% In The Stock Market In 2019

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Apple’s performance in the stock market in 2019 was unparalleled. While the benchmark S&P 500 index climbed 29% last year, Apple outperformed the index with a massive 86% surge in 2019. Following the speculation that the coronavirus outbreak in China is likely to post a major challenge for Apple in keeping up with its plans of ramping up iPhone’s production, the stock was seen trading around $309 on Monday that marked an almost 3% drop for the day.

iPhone sales were recorded at $142 billion last year. Considering the decline in sales and in an attempt to cater to the potential customers with a tighter budget, Apple is now launching a more affordable variant of its smartphones that mark the largest and most in-demand product category for Apple.

Apple Inc. is expected to reveal its performance results for the first quarter on Tuesday (after market close). Ahead of the earnings report, the company has refrained from commenting on the news.

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