Home > Industry > Coronavirus > Apple Inventory Starts To Run Out Retailers Concerned

Apple Inventory Starts To Run Out Retailers Concerned

Australia CE retailers are now concerned that inventory levels of suppliers could impact sales from April resulting in key categories such as smartphones and notebooks coming under “enormous pressure” according to executives that ChannelNews has spoken to.

Factories in China have dismissed claims by Foxconn the main manufacturer of Apple products that they are confident of being able to supply stock to retailers.

During an interview with Fox Business last week, Apple CEO Tim Cook said he believes China is starting to get the Coronavirus situation under control and expressed optimism that things will return to normal.

This led to Oppenheimer upgrading its AAPL rating from “perform” to “outperform,” saying the iPhone maker was better equipped to deal with the impact of the global coronavirus crisis than its competitors.

“Our limited checks indicate Apple will prove more resilient than others as firms worldwide navigate changing supply chains and customer demand uncertainty,” said Andrew Uerkwitz, an analyst at Oppenheimer.

This is contrary to what is happening at Apple stores in Australia where customers are unable to buy products such as the iPad Pro.

Apple Store employees claim that stocks of iPad Pro models started to run dry around a week ago, with limited availability in Australia.

“The iPad Pro tablet is seeing limited availability at stores in major cities in the U.S., Australia and Europe, according to a review of Apple’s website” reads the report.

The supply issues are also affecting the Apple Watch Series 3 and Series 5, both of which are not available to buy online.

ChannelNews understands that Apple’s main provider of iPhone ultra-wide-angle lenses in Yujingguang is having issues meeting production deadlines for Foxconn.

Management are claiming get only between 30% and 40% of all orders will be met.

Insiders are also claiming that the impact of Covid-19 in China could see Apple change its guidance for the January-March financial quarter.

Apple’s whole retail operation in China closed during the peak Lunar New Year holiday period than half of the stores were reopened with extra safety measures put in place and limited opening hours.

Foxconn which assembles the majority of the world’s iPhones from China is still facing major logistic issues and dented economic growth.

Hon Hai said Tuesday its factories are now operating at about 50% of seasonal capacity but that should ramp up over the course of the month as workers stream back into its plants.

Microsoft had to issue a guidance warning last week as the company gauged potential supply chain hiccups stemming from the coronavirus outbreak in China, this came a week after Apple made a similar move.

The Company said that the $10.75 – $11.15 billion revenue guidance for its More Personal Computing (MPC) segment (provided on January 29) — which was a wider-than-normal range to provide for the virus impact — would come in lower.

“Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated at the time of our Q2 earnings call.

Wedbush analyst Dan Ives said on Thursday, “It fans the flames on coronavirus worries,” and “Apple and Microsoft now confirm the negative impact the Street had feared.” Other than the immediate impact on sales, there are inventory and other issues throughout the electronics supply chain that will impact a broad spectrum of companies in the sector.

Already some research firms have started cutting their outlooks for certain industries. Supply chain analytics firm Trendforce said that labor shortages and travel restrictions in China would have an impact on electronics/consumer items like smartphones, smartwatches and computer panels.

International Data Corporation (IDC) lowered its forecast for personal computing devices (PCDs), inclusive of desktops, notebooks, workstations, and tablets: “According to new projections from the Worldwide Quarterly Personal Computing Device Tracker, overall PCD shipments will decline 9.0% in 2020 reaching 374.2 million by year’s end.”





You may also like
Foxconn Expects Chip Shortage To Stretch Into Late 2022
REPORT: Parts Shortage Getting Worse, Smartphone Orders Unfilled
Apple, Tesla Suppliers Halt Production Under Chinese Energy Policy
BREAKING: NSW Retail To Reopen When 70% Of Adults Vaxxed
Online Sales Skyrocket As Aussies Stay Locked Down