Apple warns coronavirus will hurt iPhone supply and its quarterly revenue

The coronavirus is taking a bigger toll on Apple's operations than it thought, and iPhone buyers around the world could see a shortage. 

The electronics giant on Monday warned that it likely will miss the quarterly revenue guidance it gave last month. It cited two reasons for the update: the coronavirus is hurting both demand from Chinese customers and production capabilities inside the country. China is one of Apple's biggest markets and the primary location where its devices like the iPhone are assembled. Because factories are coming online later, there will be iPhone shortages around the globe, Apple said. 

"Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated," Apple said in a statement. "As a result, we do not expect to meet the revenue guidance we provided for the March quarter."

 The company said guidance it issued at the end of January was based on information it had at the time, coupled with its estimates for when the pace of work would return to normal after the extended Chinese New Year holiday. At that time, Apple had factored the possible supplier and retail traffic impact into its revenue guidance for the March quarter, which -- at $63 billion to $67 billion -- was a bigger range than what it normally provides. That range was higher than the $62.45 billion expected by analysts.

While Apple sells a lot of its gadgets in China, it's also tied to the country in another key way. Apple designs its phones in the US, but the devices -- like many other electronics -- are assembled in China. Many of its employees travel frequently between the region and Apple's Cupertino, California, headquarters, and the slowdown in production in China is causing a shortage of iPhones and other Apple devices across the globe.
"Worldwide iPhone supply will be temporarily constrained," Apple said Monday. "While our iPhone manufacturing partner sites are located outside the Hubei province -- and while all of these facilities have reopened -- they are ramping up more slowly than we had anticipated."

A pneumonia-like disease, the new coronavirus was discovered in the Chinese city of Wuhan in December. The strain has now infected nearly 72,000 people and claimed more than 1,700 lives. It's spread beyond China's borders to places like the US, Japan and Australia. Authorities around the world have begun limiting travel and enforcing quarantines to guard against the spread.
Last week, the GSMA canceled Mobile World Congress, the world's biggest mobile show that was slated to kick off in Barcelona later this month. The trade association said it's "impossible" to proceed after company after company pulled out of MWC and as the coronavirus continued to spread. Apple doesn't attend MWC, but all of its rivals do. Many were expected to unveil their newest 5G phones in Barcelona, and those devices could now see some delays.