Government-ordered quarantines in place to contain a deadly coronavirus outbreak in China have forced Apple to temporarily close three stores in the country.
Apple’s good news about a record-breaking quarter this week have been tempered as executives monitor conditions in a country critical to the mass production of its most popular devices, especially the iPhone.
Following the company’s earnings call Tuesday, CEO Tim Cook told CNBC in an off-camera interview that, for now, retail is feeling the impact more immediately. The majority of Apple’s components suppliers or assembly factories are located outside of the virus’s epicenter of Wuhan.
Bloomberg on Thursday reported that two mall-based Apple stores in Nanjing and Fuzhou are closed until Feb. 3. The third store, in Qindau, should reopen on Feb. 4, according to the Apple website.
Apple CEO Tim Cook addressed coronavirus concerns during Tuesday’s earnings call, saying other stores throughout China are on limited hours. He said stores are being “deep-cleaned” after hours. Apple store managers have even been taking employees’ temperatures to stay ahead of the virus.
Apple operates 22 stores in China.
More coronavirus concerns
Two components suppliers near Wuhan are currently shut down, but Cook explained each was an alternate source – Apple has dual-sourced components in the event of a crisis. He also said Apple is drawing up a mitigation plan to address the potential disruption to manufacturing.
Hong Kong-based analyst Ming-Chi Kuo on Wednesday told investors China would need to make significant progress in containing the virus by March if Apple wants to avoid delays in production runs, both this year and next.
Kuo thinks Apple has several new products ready to be assembled this quarter, including a budget-friendly iPhone. Current travel restrictions of non-Chinese Apple employees aren’t helping Apple’s 2021 plans. Kuo said the first quarter is generally a time when employees fly to China to meet with key figures in their supply chain to line up production for the following year’s model.
Health officials have reported more than 6,000 cases of the Wuhan coronavirus, with 132 dead.