In the current situation, the revenues of many companies are falling, and many are already “barely breathing”. Moreover, the effect of a falling domino works: Apple understands that sales of equipment will begin to decline sharply and reduce orders from their suppliers. Therefore, the same Foxconn, one of the main assemblers of iPhone and iPad, is already preparing for strong losses. Of course, this could not but affect ordinary people: everywhere, there are cuts and falling incomes. Millions of people have either already lost everything or are about to lose. What is Apple holding on to now? And how long will all this be?
The introduction of the quarantine had a negative impact on iPhone sales, but the number of iPads, Macs and computer peripherals sold increased markedly compared to the same period last year. As many switched to remote work, companies began to buy computers and other equipment to provide their employees with them. Often, such purchases are made almost with the “last money”: it is profitable for companies to provide workers with computers so that they bring at least some profit. Many people make it easier – they take everything they need from the office and order little things. But there are few of them.
How Quarantine Affected Apple
Therefore, now the electronics manufacturers (I’m talking about Apple now, but the same Microsoft is doing the same) have not yet felt all the consequences of the pandemic. The Chinese factories are back in full operation and have almost ramped up production at the same rate as before the quarantine. It seems that so far “everything is fine”: they buy computers, iPads for watching movies at home too (like Apple TV), plus sales of headphones have grown significantly. Not everyone can work from home, and here some Bose with active noise can really save you from noisy households.
Many people can work remotely – from programmers and journalists to marketers and analysts, plus engineers of numerous disciplines, software testers, online store staff, and not only them. Even not too rich companies invest decent funds in the purchase of equipment, their survival depends on it.
What will happen after the pandemic
But what will happen in a month or two? Companies have already finished purchasing equipment for remote work (many did not start), employees are also not eager to buy something new from electronics, many understand that, perhaps, soon there will be nothing to eat at all. Tell me, are you planning to buy a new iPhone or MacBook in the near future? Tell us in our Telegram chat. I think there are only a few of them.
And during this time, even companies like Apple will face a strong drop in sales and, as a result, revenues. Almost everyone adheres to the self-isolation regime (I hope you do too), they don’t go to hardware stores, they don’t want to order anything online. I don’t know at whose expense producers will survive, but, probably, a certain layer of buyers will still remain. Will this bend Apple? Of course not. She does not live paycheck to paycheck, such a tech giant has enough free money to keep it afloat for years. So analysts need not worry about Apple’s fate, it will be fine. Then sales will improve, and everything will be as before.
But when will this “when” come? Even after all the quarantines have been lifted, sales will not go back on track for a long time. People will continue to come to their senses, and until incomes recover, they will not go shopping like they used to. Yes, for several days in a row the rate of infection in the world has been slowly but decreasing. Isolation is the only effective means of countering the virus, but it does start to work. But this is a very weak consolation – according to the most optimistic forecasts, by the end of the year the number of jobs will decrease by three times. Compared to before the coronavirus invasion. And who will go to the Apple Store after that? Or ordering a new MacBook or iPad from the online store?
Кому-то удается откладывать деньги на самоизоляции, но не у всех есть такая возможность.
I recently saw several commercials from China, where shops have only recently reopened, and soon after that there were queues at DOLCE & GABBANA boutiques, Gucci and other similar places. It is clear that such stores are visited by a solvent audience, which has not lost much of its fortune in a couple of months. It is very interesting to see how things are going with purchases from those people whose incomes are much lower. I don’t think they are storming shopping malls looking for trendy items.
Perhaps those who are now standing in lines for clothes of cool brands will then make the cashier for Apple and other manufacturers, but still this will not help to return sales to the previous level. There is even a question not “who will buy iPhones?”, But “when they will be bought.” What is happening now is called “market convulsions.” This is not an increase in sales, but a surge. And what will happen next is still called uncertainty. And she scares me. And you?