Coronavirus outbreak likely to disrupt Apple’s supply chain in China

On Tuesday, a report from Japan’s Nikkei Asian Review stated, Apple Inc’s plan to boost the production of the iPhone by 10% during the first half of this year is likely to hit headwinds with the coronavirus spreading further in China.

The Nikkei reported citing sources familiar with the company’s plans as saying, Apple had asked its Chinese suppliers to make up to 80 million iPhones in the first half of this year.

According to the report, Apple has booked for upto 65 million older iPhones and upto 15 million of a newer model which it will unveil in March. While the mass production is scheduled to commence in the third week of February, it is likely to get delayed given the spreading contagion of the coronavirus.

So far, the coronavirus has killed more than 100 people and has infected more than 4,500 in China alone apart from other countries across the globe, rattling global financial markets.

Apple raked in more than $142 billion in iPhone sales last year, has introduced lower priced models to woo budget conscious shoppers in order to check declining sales of its biggest product category.

In October 2019, as per a report from the Nikkei, Apple had asked its suppliers to increase production of iPhone 11 models by up to 8 million units, equivalent to 10%, hinting that demand for its recently launched flagship was picking up.

Apple is scheduled to report its first-quarter earnings after markets close on Tuesday.

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