It’s time for Apple to tell whether coronavirus will impact iPhone 12


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For the most up-to-date news and information about the coronavirus pandemic, visit the WHO website.

In February, Apple was one of the first companies to warn of the impact of the coronavirus on manufacturing. Now’s the company’s chance to tell us how hard the pandemic will hit the holiday shopping season, too.

The iPhone maker is due to report its fiscal third-quarter results Thursday, when Wall Street analysts on average expect it to tally $2.04 per share in profits on $52.1 billion in sales, according to surveys published by Yahoo Finance. That’s below the $2.18 per share Apple pulled in last year, on $53.8 billion in sales. The company also no longer reports how many iPhone units it sells, but Wedbush Securities estimates Apple will tally about $21.4 billion in revenue from its hit smartphones.

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Regardless of Apple’s financial report for the three months that ended in June, investors are likely to give the company a break, considering governments worldwide effectively shut down their economies in efforts to halt the virus’ spread. 

Apple watchers instead will be listening carefully to CEO Tim Cook as he discusses the company’s results on the after-hours conference call with analysts, during which he’ll likely be asked questions about the impact the coronavirus may have on the rest of the year.

“We continue to expect Apple to launch … new iPhones in late September,” wrote UBS analyst Timothy Arcuri in a July 12 note to investors, citing manufacturing indications from Apple’s assemblers such as Foxconn. But, he added, a higher-end version may not arrive until late this year. “Supply chain inventory remains a risk,” he wrote.

Apple shuttered its retail stores around the world during the pandemic. It’s reopened some stores, but closed others again as infections rise in different cities.

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Whatever signs Apple gives about how it expects to fare the rest of the year will be taken as a bellwether across the tech industry, which, like the rest of the world, is learning to cope with the widening impacts from the coronavirus. The pandemic has already infected more than 16.5 million people worldwide and killed more than 655,000 people  since it was first detected in December, and upended daily life for billions of people.

Apple was early to warn that the virus would be bigger than many governments expected, saying in mid February that the virus was disrupting its sales and manufacturing. That was a month before the World Health Organization labeled coronavirus a pandemic and US states began issuing stay-at-home lockdown orders. 

Apple was already hailed as one of the best supply chain companies in the world, managing a network of hundreds of suppliers to bring together massive amounts of glass, aluminum, microchips and batteries to create iPhones, iPads, Mac computers, Apple Watches and, next year, possibly an Apple headset too. Now experts are looking to Apple for any further signs of how that may impact businesses as governments weigh further lockdown orders to slow the virus’ accelerating spread.

“More than six months in, the case for national unity and global solidarity is undeniable,” Tedros Adhanom Ghebreyesus, the director-general of the WHO, said in a briefing earlier this month. Other health experts have warned that the virus will continue its spread widely without another round of shutdowns.

Rosy Apple

In late April, CEO Cook said on a conference call with analysts that production had returned to normal levels, suggesting the company had learned to weather the pandemic’s impact up to that point.

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The coronavirus has upended daily life for billions of people across the world.

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“While we felt some temporary supply constraints in February, our operations team, suppliers and manufacturing partners have been safely returning to work, and production was back at typical levels toward the end of March,” Cook said at the time. “I don’t think I can recall a quarter where I’ve been prouder of what we do, or how we do it.”

Since then, warning lights have been flashing throughout the world. Coronavirus infections and deaths have not only been accelerating, but the labor market in the US — one of Apple’s largest markets — is struggling as well. The unemployment rate in June was pegged at 11.1%, higher than 10% tallied during the worst of the global recession that hit in 2007.

The US government’s enhanced unemployment benefits also expired last weekend for roughly 30 million Americans, and more will be impacted in the coming months. And even though the stock market is bouncing to near all-time highs, economists fear that may not last unless Congress follows through on another round of stimulus and unemployment assistance it’s negotiating.

Analysts are even warning about Apple shares on the stock market, saying despite the company’s strengths, the broader economic picture worries them. “We see Apple’s recent stock performance and absolute trading level as unsustainable and would continue to recommend that investors avoid the stock,” Goldman Sachs analyst Rod Hall said in a July 22 note to investors. 

The biggest looming question he had was whether the company will give any firm guidance about September sales at all. “We continue to see short term COVID-19 rebound forecasting as extremely difficult,” he added.

See also: iPhone 11 Pro and OnePlus 8 Pro cameras compared: OnePlus has a lot to live up to

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