Coronavirus May Affect Apple’s Business In The Long Run
With over 90 people dead from the coronavirus, it is feared that the virus will affect supply chains.
The dangerous Coronavirus has claimed more than 100 lives in China so far, and Apple is taking protections. Apple’s supplier Foxconn has warned the employees not to come back to the Wuhan plant in China, who were in Taiwan for the Chinese New Year. The Foxconn facility in Wuhan quickly becomes overrun with an eruption, potentially putting workers at risk and effectively shutting down production. Instead of asking employees to stay at home, Foxconn has boost employee health checking at its Wuhan factory.
Foxconn has provided employees face masks to prevent the spread of the coronavirus. Employees must have their temperature checked daily, as one of the first symptoms of the illness is fever. The primary thing for Apple is to asking employees to stay at home. Including more than 1.8 million software and iOS Application developers, around five million Chinese jobs depend on Apple’s presence in the country. Apple employs about 10,000 people in China, and more than 90% of Apple’s products are assembled in China. Apple has three main businesses in China, i.e., retail outlets, iCloud data centers, and a huge manufacturing base.
While Apple Cloud centers are not estimated to be profoundly affected but there will be a bunch of people stepping out of their homes, and that means fewer footfalls at Apple Stores and lower sales across the nation. The more significant impact of this is also estimated to be felt worldwide.
Chinese authorities have introduced travel restrictions and taken the harsh step of quarantining the entire city of Wuhan, where the population is more than 11 million. Health authorities of China have said that the death rises due to the novel coronavirus (2019-nCoV) surge in the country has grown to 106, with 4,515 confirmed cases in 30 provincial-level regions.
The Cupertino, California based company prepares for severe scenarios like the coronavirus by mandating that major components be dual-sourced both in terms of geography and vendors, and a significant immediate effect on its manufacturing plans is unlikely for now. Even the vast majority of its assembly work is done in China, and so a lack of workers for assembly lines will have a direct effect on shipment numbers. Apple put the discharge policy in place after the 2011 tsunami and earthquake, which hit Japan and led to unit restraints for iPad 2, which the company launched that year.
From January 27, Apple has no stores in Wuhan and, the company has already minimized its working hours at retails stores across Mainland China. This shift could be because of the Chinese government increasing the lunar holiday as a means to control the coronavirus. Along with its local workforce, Apple also depends on many of its U.S. staff going back and forth across the Pacific Ocean. With United Airlines Inc. last year, disclosing the company was spending per year $35 million flying employees between Shanghai and San Francisco alone. That included 50 daily business-class seats, as per the airline.
The U.S. has raised travel alerts for China and recommended that Americans should reconsider traveling in China, and also Facebook has asked its employees to adjourn ‘non-essential’ travel to the country, and those who are working from China have been asked to work from home.