For many of us, the current outbreak of Covid-19, also known as coronavirus, seems like something that can't happen here. We know it's real, but if you're not directly connected to someone who has been impacted, it can be difficult to really put it into context. It can also be easy to overlook just what a big deal it actually is globally.
The impact is about to get much more real for companies across the world now that Apple has become the first large U.S. tech company to say that it will miss expectations as a direct result of the outbreak.
In Apple's case, the company says that it expects obstacles in terms of both supply and demand. All of its stores have closed in areas affected by the outbreak, shutting off an important source of sales in China, one of the company's most important markets. While Apple doesn't say how much of a hit it expects on sales, it had previously predicted a range of $63 to $67 billion for the current quarter.
Not only does Apple say it will likely miss its numbers this quarter, but it also expects to see a shortage of iPhones due to reduced capacity at suppliers in China. While the company says those suppliers are open, production has ramped back up more slowly than Apple anticipated. Two of the company's most important production facilities are located in Wuhan, though the company says it's developing a plan to make up for that lost production.
The slowdown comes just as Apple is rumored to be preparing to launch a low-cost model in the next few months. As iPhone sales have lost some momentum over the past few years, it isn't hard to see why the company could be counting on this year's models to help it drive an increase in sales.
And Apple isn't the only business that expects to see an impact: Volkswagen and Fiat Chrysler said they are experiencing manufacturing delays as a result of shuttered factories. Bloomberg is also reporting that Nintendo is expected to have a shortage of its Switch console by April. Finally, Walmart is expected to report quarterly results today, which could give us further information about the impact of the spread of this virus.
It's probably also worth mentioning that even if you aren't a multinational tech company or the world's largest retailer, there's a good chance that your business is going to be impacted by this global health crisis. It could mean limited access to inventory, or it might mean that you have a harder time finding the technology you've been waiting to upgrade.
Either way, we're past the point where you can simply ignore this global event, and--if you haven't already--it's probably time to make a plan for your business.