Investors hoping for a quick turnaround on Apple’s earnings may be in for a disappointment, as analysts are warning the epidemic may impact 2021.
The company is already feeling the effect of the coronavirus in the Chinese market, where it sold 494,000 iPhones last month, down from 1.27 million a year ago. According to The Street, Needham estimated normal supply and demand would resume by June 1.
The concern, however, is what will happen if supply and demand is not restored by then. Since Apple’s fiscal year begins October 1, if supply and demand remains impacted past June 1, financial results for fiscal 2021 will reflect that.
“The longer COVID-19 disruptions continue past June 1, the greater the threat to AAPL’s Sept new product launches (including its 5G phone) and Christmas selling season revenue, which represented about 32% of annual revs in each of the past 3 years,” said Needham analyst Laura Martin to investors and verified by The Street.
Should the coronavirus become a global pandemic, as the World Health Organization warns may happen, Needham’s fears will likely be realized.
