Apple signals weaker outlook on virus slowdown

Apple expects the impact of the coronavirus outbreak in China will prevent it from meeting its revenue guidance and limit availability and consumption of certain minor metals.

California-based Apple, which produces the iPhone, no longer expects revenues to reach the $63-67bn in the second quarter projected in late January as a result of a slower than anticipated ramp-up of its iPhone manufacturing sites in China and weaker demand following the lunar new year holidays.

The company expects that shortages of iPhones will temporarily affect sales, complicated by weaker demand in China.

All of Apple's Chinese stores and many of the partner stores have been closed, with plans to gradually reopen retail stories "as steadily and safely" as possible.

Apple's first quarter revenue, reported on 28 January, was the highest ever, with record quarterly profit of $22.2bn.

Apple and other cellphone and electronics manufacturers not only assemble components in China but also rely on raw materials produced in the region.

Coronavirus-related slowdowns have threatened both production and consumption of several minor metals, including indium, gallium, polysilicon and related battery materials, according to market participants.

In one example, with over 40pc of Chinese primary and secondary indium capacity in provinces adjacent to Hubei, where the coronavirus originated, US market participants expect near-term shortages in an otherwise oversupplied market.

Argus assessed US indium (In 99.99pc) prices at $155-175/kg on 18 February, up from their historic lows of $150-160/kg.

Zach Schumacher