Apple Limiting Employee Travel to China Amid Coronavirus Outbreak, Working to Avoid Supply Shortages

During today’s earnings call, Apple CEO Tim Cook commented on the coronavirus outbreak in China, which investors fear could potentially impact Apple’s business, affecting production of both current iPhones and the new low-cost iPhone that’s on the horizon.

Cook said that Apple is donating to China to help with the outbreak and working with partner companies.

We’re donating to groups that are working to contain the outbreak. We’re working closely with our Apple team members in the affected areas, and our thoughts are with all of those in the region.

In an interview with CNBC, Cook confirmed that employee travel has been restricted to “business critical travel” only as of last week, and employees in Wuhan and across China are receiving care kits from Apple.

“We’re restricting travel to business critical travel. For employees that are in the Wuhan area, we are providing care kits and supplying them across our employee population in China as well.

Cook said that Apple’s decision to set next quarter guidance with a range of $4 billion is reflective of the coronavirus outbreak and the “uncertainty around that.” Apple’s guidance for Q2 2020 is $63 to $67 billion, a larger range than normal.

The situation is still emerging, said Cook, and Apple is monitoring the situation closely and gathering data points.

According to Cook, supplier factories in wider China are opening late after Chinese New Year, on February 10, which Apple is working to manage. Apple does have suppliers in the Wuhan area, but all of these suppliers have alternate suppliers, and Apple is working to ensure good supplies. Apple has accounted for the delayed startup with its larger range of outcomes.

In its retail stores, Apple is limiting hours, checking employees, and sanitizing its stores regularly. One store has also been shut down for the time being. Apple’s retail sales have slowed due to virus concerns, but this is accounted for in Apple’s guidance numbers for Q2 2020.

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