In the current situation, the revenues of many companies are falling, and many are already “barely breathing”. Moreover, the effect of falling dominoes 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 collectors of the iPhone and iPad, is already preparing for heavy losses. Of course, this could not but affect ordinary people: everywhere there are reductions and falling incomes. Millions of people have either lost everything or are about to lose. What is Apple holding onto now? And how long will it all be?
The introduction of quarantine negatively affected iPhone sales, but the number of iPads, Macs, and computer peripherals sold increased significantly compared to the same period last year. Since many switched to remote work, companies began to buy computers and other equipment to provide them with their employees. Often, such purchases are made almost for the “last money”: it is beneficial for companies to provide workers with computers so that they bring at least some profit. Many make it easier – they take everything you need from the office and order the little things. But there are a few of them.
How Quarantine Affected Apple
Therefore, now electronics manufacturers (I’m talking about Apple now, but Microsoft is doing the same) have not yet felt the full consequences of the pandemic. The Chinese factories again worked at full capacity and almost increased the same rates of production as before quarantine. It seems to be “all is well” so far: computers are buying, iPad for watching movies at home too (like Apple TV), plus headphone sales have grown significantly. Not everyone can work from home, and here some Bose with active noise reduction are very safe from noisy households.
Many can work remotely – from programmers and journalists to marketers and analysts, plus numerous engineers, software testers, online store staff, and not only them. Even not too rich companies invest decent money 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 will already finish the purchase of equipment for remote work (many have not started), employees are also not eager to buy something new from electronics, many understand that, perhaps, soon there will be nothing to eat. Tell me, do you plan to buy a new iPhone or MacBook in the near future? Tell us in our Telegram chat. I think such units.
And at this time, even companies such as Apple will face a strong drop in sales and, as a result, revenue. Almost everyone respects the self-isolation mode (I hope that you too), they don’t go to hardware stores, they don’t want to order anything online. I don’t know at the expense of whom the producers will survive, but, probably, a certain layer of buyers will still remain. Will Apple bend from this? Of course not. She does not live “from paycheck to paycheck”, such a technological giant has enough free money to stay afloat for years. So that analysts may not worry about the fate of Apple, she will be fine. Then the sales will improve, and everything will be as before.
But only when will this “when” come? Even after all quarantines are removed, 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 as before. Yes, for several consecutive days, the rate of infection in the world is slowly but decreasing. Isolation is the only effective means of countering the virus, but it still starts to work. But this is very little consolation – according to the most optimistic forecasts, by the end of the year, the number of jobs will decrease by three times. Compared to what was before the coronavirus invasion. And who after that will go to the Apple Store? Or order a new MacBook or iPad in the online store?
Not so long ago, I saw several commercials from China, where stores just recently opened, and shortly after that there were lines in boutiques DOLCE & GABBANA, Gucci and other similar places. It is clear that solvent stores go to such stores, which in a couple of months have not greatly lost their fortune. It is very interesting to see how things are with those people whose incomes are much lower. I don’t think that they are storming shopping centers in search of fashionable things.
Perhaps those who are now in the queues for belongings of cool brands will then make cash for Apple and other manufacturers, but still this will not help return sales to the previous level. Here the question even is not “who will buy iPhones?”, But “when will they be bought”. What is happening now is called “market convulsions.” This is not sales growth, but their surge. And what will happen next is called uncertainty. And it scares me. And you?