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Experts say we are just beginning to understand the economic cost of coronavirus.
Angela Lang / CNET
For the most up-to-date news and information on the coronavirus pandemic, visit the WHO website.
When Apple warned in February that the coronavirus It would affect the company’s sales and the supply of iPhone, it was a surprise. We knew that the virus, which causes a disease called COVID-19, was devastating life within China and part of Europe. But he had not yet severely disrupted life in the United States.
Two months later, nearly 1 million cases have been confirmed in the US. And many people face increasingly lengthy lockouts until enough widespread disease testing can be done. Medical authorities have confirmed at least 211,000 deaths and more than 3 million cases worldwide, according to data compiled by Johns Hopkins University & Medicine.
On Thursday, Apple will go from sounding the alarm to sharing the details when it releases its second-quarter fiscal results. Unlike in previous years, investors have no idea what to expect. Many companies have withdrawn any guidance they gave Wall Street, simply saying that Apple will not comply with the numbers they had offered before.
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In the case of Apple, the iPhone maker expected to post sales between $ 63 billion and $ 67 billion, even with the first warning signs that the coronavirus shows a disruption to manufacturing and supplies across China in December and January.
“Do the numbers matter?” Toni Sacconaghi, a longtime Apple analyst at AllianceBernstein, wrote in a note to investors. He added that he does not have much conviction in the forecasts, partly because “everyone knows that the second quarter fiscal results will not be good.”
He also hopes “the worst is yet to come.”
Everything Apple says will be interpreted as a reference, since the iPhone manufacturer is the most valued technology company in the world. Their sales and profits outshine those of most other companies. Additionally, the $ 220 billion Apple has in the bank makes it larger than the gross domestic product of many countries, including Greece, New Zealand, and Panama.
No one questions whether Apple will resist the coronavirus and its economic consequences, just as the company easily survived the recession a decade ago. But in trying to forecast what the next year will be like, Apple analysts use words like “economic abyss,” “dark days ahead,” and “dark valley.”
Yahoo says analysts on average expect Apple to report earnings of $ 2.28 per share of $ 54.7 billion in sales, a drop of more than 5% from the same period last year.
“The negative impact of the global social distancing driven by COVID-19 on the overall economy and on several of our companies’ end markets has been severe,” analysts at Goldman Sachs wrote. The company also downgraded Apple’s stock rating to “sell,” in part because it believes other analyst estimates are too optimistic.
Apple declined to comment before its earnings.
Angela Lang / CNET
Apple’s future 5G
Although Apple released a new MacBook Air, IPad Pro, Magic Keyboard and iPhone SE for $ 400, none of that will matter much to Apple watchers. The biggest question on everyone’s mind will be the next iPhone, which is expected in the fall.
Rumor mill increasingly points to an iPhone that will include 5G wireless technology. This new cellular signal promises download speeds 10 to 100 times faster than what we have now.
That’s part of why almost every new phone this year has built-in 5G or will offer a 5G variant. That includes the Samsung Galaxy S20 5G, the LG V60 ThinQ 5G and the OnePlus 8. In addition to many having a striking “5G” attached to their names, all of these phones also have a premium. However, the $ 699 OnePlus 8 shows that prices are going down.
While the next iPhone is expected to have 5G as well, the biggest question is when. There are increasing rumors that the iPhone 2020 may be delayed due to the slowdown in manufacturing and the shortage of supplies related to the coronavirus. A Nikkei report, citing anonymous sources with “direct knowledge” of Apple’s internal discussions, said the phone could be delayed “for months.” Meanwhile, the Wall Street Journal said Monday that its sources estimate the delay at about a month.
Unfortunately, even for Apple, analysts say someone is unlikely to really know if the iPhone will be delayed until closer to the launch date. And even if it launches on time, or a little later, almost all experts agree that the company will have limited supplies at first.
Apple CEO Tim Cook, who is notoriously tight-lipped, will likely stick with generalities about how great the product line is for the future when speaking to analysts in a conference call after his company’s earnings announcement on Thursday. But it is also an opportunity for him to point out how one of the world’s largest companies is going through one of the worst health catastrophes in generations.
Katy Huberty, an analyst at Morgan Stanley, told investors in a memo last week that Apple is likely to discover how to help make the iPhone 5G device a success. “Apple took its medicine early,” he said.
