Samsung Electronics faces a sheer plunge in smartphone sales in Q2 because of the coronavirus pandemic. Apple may see a similarly negative impact on its business as smartphone manufacturing and sales slow down.
Apple noticed a significant drop in smartphone manufacturing as China’s manufacturing unit capability dropped by 70%. Apple recorded a 61% annual drop in iPhone sales based on data from the China Academy of Information and Communications Technology (CAICT).
iPhone manufacturing facilities in China are forgoing workers as a result of diminishing demand. It indicates that the worldwide smartphone sector is struggling, which puts more pressure on Apple ahead of the earnings season.
Apple focused on diversifying its operations into the streaming and wearable industries in the past two years. It noticed that the smartphone sector was plateauing in early 2019, as it turned less compelling for users to purchase a brand new phone yearly.
The technological specifications of contemporary smartphones improved to a point where users don’t really feel the need to regularly change their telephones.
Apple’s entrance into the wearable space was a major hit. The demand for AirPods Pro elevated rapidly, inflicting Apple to double production by last November.
The success of the AirPods series is admirable, but the firm’s reliance on iPhones leaves AAPL vulnerable to a pullback after its earnings release.