APPLE IN PERIL as iPhone supply chain in question

When the “Wuhan flu,” as it was called at the time, emerged as a health threat in China, Apple customers wondered if it would affect their ability to snag the latest iPhone model in 2020. Today, of course, iPhone owners have much bigger issues to deal with as the coronavirus spreads through the United States, but the issue for Apple stakeholders remains at the forefront of financial concern.

Apple has long relied on its Asian supply chain to manufacture many of its most popular devices. The company could not stock up on its most popular product, the iPhone, in late 2019 because of factory shut-downs in China. The result: the highly anticipated (and less expensive) iPhone SE2 model most Apple fans expected to debut in March has yet to make an appearance. With the United States hovering on the edge of an unprecedented economic slowdown, many analysts wonder how many consumers will be willing to pay for these pricey gizmos anyway[1].

The iPhone SE2 will likely cost, in its most basic form, about $400.  Analyst Daniel Ives recently suggested it could debut in mid-April in a “low-volume, low-touch release with little fanfare.” Ives seemed to indicate he believed the phone would launch because the phones are “already ready to ship.”[2] Ives described the launch as “a head-scratcher” because it will take place against “the backdrop of a consumer global lockdown and unprecedented pandemic.”

Apple stock has fallen 17.8 percent from the start of the year, and the company cut its revenue expectations in February. Apple Music is growing faster than other music streaming services in the industry, although Spotify still dominates the space. Many investors believe now is the time to buy Apple stock simply because so many Americans are making more use of Apple-produced entertainment products than ever before.

Thanks to a move begun four years ago to reduce the company’s reliance on iPhone sales, Apple may be able to shore up its numbers by meeting its fiscal services revenue target by the end of the 2020 fiscal year.

Do you think Apple is actually in trouble?

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[1] https://www.marketwatch.com/story/apple-in-the-age-of-covid-19-can-new-iphones-be-made-and-who-will-buy-them-2020-04-06?mod=home-page

[2] https://www.slashgear.com/apple-tipped-to-release-new-low-cost-iphone-in-next-two-weeks-06615671/

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