Jaromir Miko For ordinary people, the coronavirus poses a potentially deadly danger. To date, 4 cases of infection have been confirmed, including 581 with fatal outcomes. For health organizations, this represents continuous monitoring of the situation and an international effort to research and develop antibodies. For governments, the necessity of creating preventive measures so that the virus cannot spread further. And for companies like Apple this could mean crippling the production of products like AirPods Pro, whose availability is already limited.
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Dan Pražák Apple, like many other companies, relies on China for the production of its products, whose government is now taking measures toá perhaps only in totalitarian regimes: in an attempt to prevent the spread of the disease, it closes cities and residents, suspends massou transport and also extended time off related to the annual Chinese New Year celebrations. It is the fact that the Chinese government can order the closure of cities or even factories at any time, worries investors and companies that depend on Chinese labor.
It is a key city for Apple Zhengzhou from the province Che-nan. It is here that the giant Hon Hai Precision Industry Co. factories are located, in which Foxconn manufactures tens of millions of iPhones, iPads and other Apple products every year. Last year, 27% of all mobile phone production came from this province alone, and Foxconn alone handled more than 60 % of all province sales.
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The closure of factories or cities in the event of the spread of the disease is therefore a valid reason for concern. “I can't think of a case where the supply chain wouldn't be disrupted. If there is a single hitch, whether in mineral mining, manufacturing, storage, testing or shipping, the system will be disrupted,” said the senior analyst at Moor Insights & Strategy Patrick Moorhead.
City Zhengzhou it is safe for now, as it is more than 500 kilometers from Wu-cdamn Even so, they were already in the province Che-nan the first cases of the disease were reported. Foxconn said it is monitoring the situation and taking strict measures to prevent contamination of its factories. However, the Chinese government can still order a temporary factory or city shutdown if the situation worsens.
Apple declined to comment on the report, but it is expected that Tim Cook will not shy away from questions about the threatened production of the device. Tonight, the company will announce financial results and also hold a conference call with investors and analysts. As far as activities in China are concerned, Apple has shortened its store hours until February 7/2020, unlike other companies such as e.g. Starbucks so your stores for now does not close. Apple directly employs 10 people in China, and millions more take care of the production of its products workers in factories and other parts of the supply chain.
Although the production of the next generation of iPhones will not begin until the second half of the year, according to Bloomberg, the company is already preparing next month commencement productiony an as-yet-unrevealed cheaper phone, which is speculated to be the iPhone SE 2 or iPhone 9.
Source: Bloomberg
