There have been concerns that this could impact the production of various consumer goods with news of Coronavirus spreading around China and the world.
Apple would be one of those possibly affected. Apple CEO Tim Cook tells its investors that their production might be impacted due to the use of suppliers from Wuhan.
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Why the decline?
Apple analyst Ming-Chi Kuo confirmed Cook's statement, saying the coronavirus outbreak may hurt Apple's delivery forecasts for the first quarter of the year. Based on this, he has revised his shipping estimates for iPhones in Q1 2020 to 36-forty million units, which is a seemingly 10% decrease than before.
Apple might not be alone in suffering from this situation. Kuo says that he has visible phone shipments inside the Chinese marketplace decline by 50 to 60% every year.
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The decline could be due to the Chinese New Year, where most companies take a break during the holiday. Some of the employees also worry about the coronavirus outbreak, which started in Wuhan. The incident has led to some corporations closing down temporarily.
Unofficial sources said that Apple recently made an order to assemble around 80 million phones, including the "iPhone 9" or "iPhone SE 2." The move, alongside Tim Cook's statement, has led to analysts predicting that the rumored less costly iPhone model could be disrupted.
All of Apple's corporate offices and contact centers in mainland China were closed since February 9 due to the coronavirus outbreak. Apple's decision was after the World Health Organization declaring Wuhan coronavirus, a global public health emergency.
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Foxconn denies claim on production delays
Apple's key iPhone manufacturing partner, Foxconn, denied that there will be any production delays and that this latest order will be filled on time.
In a statement, Foxconn denied reports that it plans to reduce its workforce. Apple's electronics manufacturer underscored that they continue to recruit employees to support business and operations globally.
Foxconn added it would continue to maintain a workforce of over one million employees worldwide. The company, being one of the largest private employers globally, is staffed with about 1.3 million people during peak production times.
Foxconn underscored that it is investing in the automation of most of the manufacturing tasks associated with their operations, applying robotics engineering and other innovative production technologies to enable their employees to focus on essential elements in the manufacturing process.
"The magnitude of our employee recruitment is expected to decrease in the years ahead, but we have no plans to reduce our workforce numbers now or anytime in the future," the company said.
Smartphone prices are forecast to drop from an average selling price of US$297 in 2014 to US$241 by 2018, research group International Data Corp said. Falling prices will pressure smartphone manufacturers to become more creative in product design and sales as markets become more saturated.
