With researchers and medical professionals still working hard to contain the spread of the coronavirus, tech companies with a heavy manufacturing presence in China have been feeling the squeeze. Shares of Apple, for example, have plummeted drastically over the past few days, with the stock falling by more than 50 points since last week.
In light of the coronavirus, Apple earlier this month issued a press release indicating that investors should anticipate lower than expected earnings for the quarter on account of store closings in China and production slowdowns. Indeed, there have been some rumblings that iPhone 12 supply might be constrained at launch later this year.
More recently, Tim Cook sat down for an interview with Susan Li of FOX Business Network and touched on a variety of topics, including the App Store and, of course, the coronavirus’s ongoing impact on Apple’s business.
With respect to the App Store, Cook said that Apple has paid out more than $155 billion to developers since the App Store opened up nearly 12 years ago, a hefty figure to say the least.
With respect to the coronavirus, Cook said the following:
Well, it — first of all, let me say again, because I think it’s so important in an environment where people are trying to get well and health professionals are putting their wellbeing on the line to help people get well, that we’re human beings first and business leaders second. And so that — that is my philosophy and so people are number one.
In terms of our business, here’s what we’re saying to give you a flavor for what’s happening on the ground is we had closed — I’ll talk about the stores first. We had closed stores — all of our stores.
Now we’ve reopened the vast majority of them. And so we were able to put the necessary conditions in place to reopen the store. We’ve reopened the vast majority of them, over 80 percent.
That said, many of the open stores are still operating at less than full capacity. Cook, however, intimated that the stores may return to normal working hours sometime soon.
As for Apple’s manufacturing partners in China, Cook said:
When you look at the parts that are done in China, we have reopened factories. So the factories were able to work through the conditions to reopen. They’re reopening. They’re also in ramp.
And so I think of this as sort of the third phase of getting back to normal. And we’re in phase three of the — of the ramp mode.
And I — things are going pretty much like we thought they would go there in terms of bringing things back. And so it’ll — it will take some time, but by in large I think this is a temporary condition, not — not a long term kind of thing. You know, Apple is fundamentally strong, and that’s — so that’s how I see it.
Incidentally, with shares of Apple down as much as they are, Cook mentioned that the company continues to engage in stock buybacks as part of its Capital Return Program.
As to the potential that Apple might try to significantly shift its manufacturing to countries outside of China, Cook said that the appeal of China isn’t solely about cost, but about the quality of the work as well. The full video of Cook’s interview can be viewed over on the Fox Business website.