Tim Cook calmed his staff at Covid-19 | Apple is struggling

Apple CEO Tim Cook today sent an email advising employees to protect their health and safety when the Covid-19 epidemic is raging.

"You,

The outbreak of Covid-19 pneumonia has greatly affected the lives of many members of the Apple family. I want to thank everyone for the dedication, empathy, understanding and consideration. Today, we have doubled our donations to support the health of the unfortunate people globally.

Our top concern is the people who make up Apple's China community of employees, partners, customers, and suppliers. I realize many people on the team are working around the clock with diligence and thoughtfulness to get feedback on Covid-19 around the globe.

Company offices and contact centers have reopened all over China, as are stores, but we are experiencing a slower than usual return and slower than expected. This afternoon, I have shared the information I learned with investors and shareholders, and said that the revenue in the third fiscal quarter will not reach as expected.

As for markets outside of China, customer demand for products and services remains strong as expected. Apple is basically always strong, and this disruption to our business is only temporary.

Our top priority right now and in the future is always the health and safety of you, our supply chain partners, customers and the communities in which we operate. Apple would like to extend its deepest gratitude to those at the front lines who are facing day and night emergencies and protecting public health.

Heart".

Tim Cook's letter was sent to staff amid the corona virus outbreak in China, with more than 2,000 deaths. Apple relies heavily on Chinese factories to assemble phones. The world's most populous country is also the second most important market after the United States.

When the Covid-19 virus broke out, Apple had to close 42 stores across China. Currently, the Cupertino-based company has announced to adjust its forecast for the second fiscal quarter's revenue forecast for 2020 lower than the original.

Earlier, the Apple CEO also said on Twitter that the company wants to "send affection and support" to people affected by the corona virus, but did not mention the blueprint.

Apple is struggling because of nCoV
Apple's acknowledgment that the outbreak of Covid-19 pneumonia is affecting revenue, which is considered a rare move by the company.

On February 17, Apple said it would not meet its business targets for the first quarter of 2020 because of an epidemic that left them both in terms of production and product sales.

According to the New York Times, to Apple, proactive warning is something "very unusual". They are one of the most profitable firms in the world and have more than $ 200 billion in cash. The last time Apple lowered its revenue forecast was in January 2019 - the first time in 16 years - due to declining iPhone procurement demand in China.

Apple relies heavily on Chinese factories to assemble phones. The world's most populous country is also the second most important market after the United States. But Apple has had to close 42 stores across the country.

"People are starting to return to their jobs in China but letting things return to normal will take longer than we expected," Apple said.

Not only Apple, many global companies are producing goods in China. Chinese consumers are also strongly selling items from socks to iPhones and the most luxurious items.

Fear of pneumonia epidemic strongly affects the global economy. As of February 19, there were 75,184 cases of nCoV infection and 2,009 deaths. According to the New York Times, about three quarters of billionaires in China are in a state of limited travel.

When the disease broke out, a huge network of factories in China, accounting for a quarter of global production, was wobbly and sluggish. Fiat Chrysler has closed its factory in Serbia because of a shortage of parts from China. Airbus said its aircraft assembly line was leveling off while companies like General Motors and Toyota began limiting production over the past few days.

Shopping malls in China became deserted, seriously threatening sales of a number of global brands. Some international airlines such as Delta, United, Lufthansa, British Airways have canceled their flights to China while the global hotel chain is sluggish as tourists from the world's most populous country plummeted.

Meanwhile, Apple has made big bets on China for more than a decade. The Foxconn factory is responsible for manufacturing iPhones and other Apple products as well as a range of electronics companies around the world. Foxconn declined to disclose details of those factories that reopened after the Chinese New Year holiday, but also denied reporting that by the end of this month, they had only reached 50% of the production plan. No iPhone factory is located in Hubei province, where the outbreak of Covid-19 pneumonia occurred.

Last month, Apple forecast a 9-15% revenue increase in the first quarter of 2020. At that time, Tim Cook explained the gap in the forecast was wider than usual due to uncertainty about the consequences of the Covid-19 epidemic. Apple's first-quarter 2020 revenue is heavily dependent on China because Tet is the occasion for people to spend money on gift shopping, including Apple products.

Of the 42 Apple stores in China, only 7 are reopened with limited operating hours.

Even when the iPhone factory is as productive as they are, they still face challenges due to their dependence on the network of component suppliers here. All these suppliers need to pass rigorous government inspections of working conditions, isolate effective cases of suspected cases, etc. to be able to work again.

Apple issued a warning of decline right after a successful quarter. In the last three months of 2019, its revenue in China grew sharply thanks to the popularity of the iPhone 11.

"Apple is basically still very strong, this decline is only temporary," Apple said.