Technology giant Apple announces declining production rate in China due to virus spread • Estimate: profits will plummet by at least $ 10 billion
Corona damages economy // Photo: Islands times
First clue to the major economic impact of the Corona virus on the world: Apple technology giant, released Monday (Monday) ahead of the end of the US Stock Exchange trading day announcement to its customers and stockholders in the company. In a statement, it says it will not be able to meet its production and profit targets earlier this year as expected for the current quarter, following a slowdown in iPhone production in China due to the spread of the Corona virus.
Remember, the company estimated earnings in the first quarter of 2020 at $ 65-67 billion and now profits appear to be dropping at least $ 10 billion. The closure, disruption of production, and other consequences of the virus spread prevented a regular return to production in the company's factories in China.
In addition, there was also a slowdown in the pace of buying the company's products in China, the domestic market is in a slump and there is a decrease in demand for Apple's products as well, so the company suffered an economic blow here as well. Apple is concerned that the injury will go beyond the first quarter of 2020, affecting the company's profits and operations in the second quarter as well. The company noted that had it not been for the Giant Corona epidemic, it would have met its targets due to high demand for its products in the rest of the world. "
A blow to the global economy
Analysts estimate that the world economy will shrink for the first time since 2009. Already many car companies in them: Nissan, Hyundai, Fiat and Chrysler have had to stop or warn that they will stop some of their car production due to parts of China arriving at their car manufacturing plants. This could spread to other industries, as the production of the Chinese economy is relevant to almost every area of our lives.
Corona effect: Technology companies are abandoning China
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In the meantime, many American companies that now have their manufacturing center in China appear to be turning to Indonesia as an alternative. Apart from the virus, this has a broader principle, which is the US-China trade war that has taken place in recent months.
Another interesting effect that may arise from the current crisis is the acceleration of the field of mass production robotics so that robots replace human producers affected by disease and political struggles between countries.