All Apple Stores in China Will Be Reopened by Friday

As the coronavirus continues to spread in the United States and other countries, Apple is preparing to reopen its retail stores in mainland China. All 42 locations in the country will be open as of Friday local time, Apple confirmed to Bloomberg's Mark Gurman.


Apple started shutting down select stores in China in January, and in early February, closed all stores in China. As the spread of the virus has abated in China, Apple has been reopening stores, and at the end of February, more than half of retail locations in the country were open.

Following the closure of its stores in China, Apple announced that it will not meet its March quarter revenue goals, citing both constrained iPhone supplies worldwide and lower customer demand for Apple products in China.

Government data shared earlier this week suggested Apple sold 60 percent fewer iPhones in China in February 2020 compared to February 2019.

Coronavirus infection numbers and deaths have been steadily declining in China over the course of the last few weeks, and the worst of the outbreak seems to be over.

Apple may soon be facing store closures in the United States as the coronavirus continues to spread. Large events and gatherings have been banned in many states, major sporting events have been canceled, and Disneyland has shut down for the rest of the month. There are more than 1,500 known coronavirus cases in the United States and over 30 people have died.
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iPhone Production Resumption in China Exceeds Foxconn’s Expectations, But US Sales Concerns Remain

The founder of iPhone assembler Foxconn said on Thursday that the resumption of production at its factories in China had "exceeded expectations," following the coronavirus-related disruption of supply chains (via South China Morning Post).

[Terry Gou Tai-ming] told reporters that the return to work effort at Foxconn's factories in China had "exceeded our expectations and imagination," and that supplies to its plants there and in Vietnam had returned to normal.
Foxconn slashed its 2020 revenue outlook after strict quarantines were enforced at its China plants for a period in February to guard against the coronavirus outbreak. The manufacturer went on to suffer its biggest monthly drop in revenue in about seven years because of the containment measures.

The manufacturer had earlier claimed the viral outbreak had had a "fairly small impact" on ‌‌iPhone‌‌ production, suggesting its factories in other countries like Vietnam, India, and Mexico had been able to fill the gap.

China's coronavirus epidemic has passed its peak, its top health commission said on Thursday. It logged just eight new infections in Hubei province, the first time the epicenter of the outbreak recorded a daily tally of less than 10. Following the slowdown of the spread of the virus, more businesses have reopened in China as authorities ease strict containment measures.

However, for the Taiwan-based company, which is Apple's main assembler of iPhones, production issues have now been replaced by U.S. sales concerns.
"In the United States, what we are worried about is the market," said Guo. "If production was resumed quickly but consumers stop spending... that would be key to the economic recovery."
The Foxconn founder also raised concerns about the electronics supply chain in Japan and South Korea, which are grappling with their own serious outbreaks of the COVID-19 disease. Gou also cited rising prices for RAM chips and supply issues with display panels, but didn't elaborate.

In China last month, Apple sold fewer than 500,000 iPhones amid the ongoing curbs on travel and transport – a 60 percent slump in ‌iPhone‌ sales compared to the February 2019 quarter.

Apple in mid-February announced that its financial guidance for the March quarter would fall short due to the COVID-19 outbreak. During the January earnings call, Apple said it expected to see revenue of $63 to $67 billion in the March quarter, but that is no longer a goal the company will be able to meet.

Apple cited lower customer demand in China and constrained ‌‌‌iPhone‌‌‌ supplies worldwide as the factors leading to lower than expected revenue.
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iPad Stocks in China Dwindle as Kids Switch to E-Learning Amid Coronavirus-Related School Closures

iPad stocks are reportedly running low in China because parents are buying them to help with e-learning at home in response to school closures relating to the coronavirus outbreak.


Nikkei Asian Review today reports that labor shortages have also seen suppliers struggle to meet production demands, amid government-imposed restrictions in an attempt to curb the spread of the virus.
"Later the need surged even higher when China opened schools but asked students to take the courses online," one person familiar with the situation said. "The shortage of the ‌iPad‌ range is up to four weeks of waiting, especially for the cheaper models. The supply could not meet the pace of the demand at all."
Today, Apple's regional online store for China shows a three to four week delivery time for orders of the low-cost 10.2-inch ‌iPad‌, while anyone ordering a 12.9-inch iPad Pro will have a wait of up to two weeks.

Demand is said to have been rising since January when Beijing imposed quarantine measures. One source told Nikkei that Apple recently ordered a 20 percent increase in production of iPads for the first half of this year, compared with the production forecast it gave suppliers in January, prior to the outbreak.

In Wuhan, where the outbreak began, schools are closed, and children have been using an Alibaba-owned corporate app called DingTalk to attend classes remotely. At least 50 million students are reportedly now taking classes online using the app, which would go a long way to explaining the strong demand for iPads.

Typically this would be positive news for Apple, but with suppliers severely affected by the spread of the coronavirus, the company has been unable to keep ‌iPad‌ stocks plentiful. Conversely, Apple has been unable to match 2019's iPhone sales figures across China, with fewer than 500,000 iPhones sold last month amid the ongoing curbs on travel and transport, according to government data.

Apple told investors in February that it wouldn't meet its revenue guidance for the quarter because of the impact from the epidemic.

The company closed all 42 of its retail stores in China at the beginning of February as the outbreak worsened, but most of the stores have re-opened, although many are operating with shortened hours. New infections and deaths reported in China have steadily declined in recent weeks, suggesting the enforced movement restrictions are having an impact on the spread of the disease.
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Apple Sold 60 Percent Fewer iPhones in China Last Month Compared to February 2019 Amid Coronavirus Restrictions

Apple sold fewer than 500,000 iPhones in China last month amid the ongoing curbs on travel and transport, according to government data shared on Monday (via Reuters).

Shipments of Apple devices slumped to 494,000, from 1.27 million in February 2019. In January, their shipments had held steady at just over 2 million.
That amounts to an almost 60 percent slump in iPhone sales – worse than IDC's forecasted drop in overall smartphone sales of roughly 40 percent in the first quarter due to the impact of coronavirus.

China's restrictions on public movement were enforced in late January just ahead of the Lunar New Year Festival and remained in place throughout most of February, which appears to have crippled demand for smartphones.

According to data from the China Academy of Information and Communications Technology, mobile phone brands shipped a total of 6.34 million devices in February, down 55 percent from 14 million sold in February 2019.

Android brands like Huawei and Xiaomi suffered the worst, with shipments collectively declining from 12.72 million units in February 2019 to 5.85 million.

Apple closed all 42 of its retail stores in China at the beginning of February as the outbreak in China worsened, but most of the stores have re-opened, albeit operating with shortened hours. New infections and deaths reported in China have been declining in recent weeks, according to government data, suggesting the virus may have peaked there.

Apple in mid-February announced that its financial guidance for the March quarter would fall short due to the COVID-19 outbreak. During the January earnings call, Apple said it expected to see revenue of $63 to $67 billion in the March quarter, but that is no longer a goal the company will be able to meet.

Apple cited lower customer demand in China and constrained ‌‌iPhone‌‌ supplies worldwide as the factors leading to lower than expected revenue.


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WSJ Examines Apple’s Reliance on China Amid Coronavirus Outbreak

Production on Apple's devices has been stymied in recent weeks due to delays caused by the coronavirus outbreak in China. Many of Apple's China-based suppliers had to shut down for two weeks or more in February, and there are still staffing issues as factories work to ramp up production around travel bans, quarantines, and other problems.


Amid the China coronavirus outbreak, which has caused Apple to announce that it won't make its March quarter revenue goals, The Wall Street Journal has taken a look at Apple's reliance on China and why Apple is likely to continue to be dependent on China for the foreseeable future.

Apple's operations team has been raising concerns about the company's reliance on China, and as early as 2015, there were suggestions that Apple relocate assembly of one or more products to Vietnam, allowing Apple to start training workers and creating component providers outside of China.

Senior managers shot down the idea at the time, and transitioning away from China has been "too challenging to undertake." Apple has, however, begun to move some production outside of China. Apple has moved AirPods Pro assembly to Vietnam due to tariffs, and now produces some iPhones in India, but a complete break "is impossible."

As The Wall Street Journal points out, Apple CEO Tim Cook has been downplaying the need for changes in the supply chain. On Friday, Cook said in an interview that if there are supply chain changes because of the coronavirus, it will be "adjusting some knobs, not some kind of wholesale fundamental change."

Apple is not able to break away from China because China has hundreds of thousands of employees, both skilled and unskilled, that have expertise in manufacturing Apple's devices.
Finding a comparable amount of unskilled and skilled labor is impossible, said Dan Panzica, a former Foxconn executive. The population in China has allowed suppliers to build factories with a capacity for more than 250,000 people. The number of migrant workers in China, who do much of Apple's production, exceed Vietnam's total population of 100 million. India is the closest comparison, but its roads, ports and infrastructure lag far behind those in China.

"You're not going to be able to have mega-factories anywhere else," Mr. Panzica said. "You're going to have to break them up."
Should Apple decide to move production out of China, that could impact device sales in the country. China is responsible for close to a fifth of Apple's total revenue.

Apple's relationship with China began many years ago, when Foxconn began making iPods in 2001 and the iPhone in 2007. As Apple device sales have grown, the factories that assemble Apple devices have also grown in tandem, resulting in what The Wall Street Journal describes as a "triangle of interdependency."
Apple grew to depend on Foxconn to make devices and Chinese consumers to buy them. Foxconn built its business by leaning on China's vast workforce and control over land to construct factories. And China became beholden to Foxconn as the nation's largest private-sector employer and Apple as a trainer of new technology suppliers.
Apple did plan to assemble some iPhone 11 models in India, but the effort was halted before a single manufacturing line was set up, as Apple believed India was not ready to supply the skilled labor or robust infrastructure that Apple expects. ‌iPhone 11‌ models were produced in China instead.

That's not likely to change in 2020 because there's no supply chain in place and workers in India aren't ready to produce the high-end iPhones that are expected to be released in 2020. As for U.S. production, Apple is manufacturing some Mac Pro models in the United States (those sold in the United States), but ‌Mac Pro‌ models sold in the rest of the world are still manufactured in China because the U.S. also doesn't have the skilled labor force that China has available.

The Wall Street Journal's full report on Apple's dependence on China can be read on The Wall Street Journal website.


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Apple Implicated in New Report on Chinese Forced Labor

A report by the Australian Strategic Policy Institute think-tank has named Apple among 83 other major companies benefiting from the use of potentially abusive labor transfer programs.



The Chinese government has allegedly transferred thousands of Uyghur Muslims and other ethnic minorities from Xinjiang to factories across the country, implicating global supply chains.

The report estimates that at least 80,000 Uyghurs were transferred out of Xinjiang to work in factories across China between 2017 and 2019, some of whom were sent directly from "detention camps".

Transferred workers typically undergo organized Mandarin and ideological training outside working hours, are subject to constant surveillance and are forbidden from participating in religious observances. The Washington Post has corroborated the report's claims.

China has attracted international condemnation for its network of extrajudicial "re-education" internment camps in Xinjiang.

The report identifies four Chinese factories in Apple's supply chain which use Uyghur labor to make parts for Apple and its suppliers.

O-Film Technology Co., which supplied camera modules for iPhone 8 and iPhone X, and BOE Technology Group, a company set to become Apple's second-largest OLED screen supplier by 2021, both reportedly use Uyghur labor, either directly or through contractors. AirPods supplier GoerTek is also listed.

As many as 560 Xinjiang workers were transferred to factories in central Henan province, including to Foxconn Technology's Zhengzhou facility, which reportedly makes half of the world's iPhones.

Over the past decade, Foxconn has been marred by allegations of worker exploitation and even suicides, including recently at its Zhengzhou facility.

In 2019, Apple released a supplier responsibility progress report, stating that "we hold ourselves and our suppliers to the highest standards to ensure everyone is treated with dignity and respect".

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tags: China, Foxconn

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Apple Declines Request to Testify at U.S. Congressional Hearing Probing Ties to China

Apple has again declined a request to testify at a U.S. congressional hearing that is part of a wider investigation into Chinese influence on technology companies.


According to The Washington Post, both Apple and TikTok declined an invitation from U.S. Senator Josh Hawley to attend the hearing, which took place on Monday, February 24.
Apple and TikTok each have declined a request to testify at a March congressional hearing that would have probed their relationships with China, a move that threatens to ratchet up tensions with federal lawmakers who see Beijing as a privacy and security threat.

Republican Sen. Josh Hawley (Mo.), one of TikTok's leading critics, had invited the two tech firms to appear at a March 4 session, his office confirmed Monday. Both previously had declined to testify at a hearing last year on the same issue.
According to the Post, TikTok has said it plans to send a representative to engage with the subcommittee at a later date, but Apple has not commented on its absence.

Apple and TikTok skipped a similar hearing in November last year, leaving two chairs empty at the meeting with only placards bearing the companies' names.

Senator Hawley, who is a frequent critic of Apple for its ties with China, attacked the company for its no-show, saying its entanglement with the country's authoritarian government was "a fact they would rather we think not too much about."

In October, U.S. lawmakers called out Apple for not standing up for democratic values and free speech in Hong Kong, after it pulled an app from the App Store that protestors had been using to track police movements in the city state, saying it violated the company's guidelines and local laws.

Apple initially approved the app after reviewing its decision to initially reject it app from the ‌‌App Store‌‌. Its reversal came after the Chinese Communist Party's flagship newspaper criticized the company for letting the app into its store.

"Apple assured me last week that their initial decision to ban this app was a mistake," tweeted senator Hawley at the time. "Looks like the Chinese censors have had a word with them since. Who is really running Apple? ‌Tim Cook‌ or Beijing?"

In a related development today, The Guardian reports that Apple could be forced to disclose details of censorship requests from China after two major shareholder groups backed a proposal that would force the tech giant to make new human rights commitments.

The motion is set to be voted on by the company’s investors on Wednesday, and was prompted by numerous allegations of Apple kowtowing to Beijing and blocking apps from being used by Chinese customers. Apple reportedly failed in an attempt to block the vote from taking place.

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Political News forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tag: China

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Over Half of Apple’s Retail Stores in China Reopened Amid Ongoing Coronavirus Outbreak

Apple has now reopened 29 of its 42 retail locations in China, according to Apple's store websites in the country that were reviewed by Bloomberg. Many of Apple's stores in China have been shut down for the last few weeks due to the COVID-19 coronavirus outbreak.


Most locations that have been reopened continue to operate on shortened hours, with some open for less than eight hours a day. Additional stores are expected to reopen as soon as this week, but there is no word on when all Apple Stores in China will be operational.

Apple last week said that its March quarter revenue will fall short of expectations because of constrained iPhone supplies worldwide and lower customer demand for Apple products in China caused by store closures.

The shuttered stores and limited hours have significantly reduced customer traffic, and though Apple's supplier factories in areas outside of the Hubei province have reopened, ramp up to full production on devices has been slower than expected.

According to a second report from Bloomberg, Apple's ‌iPhone‌ sales started dropping in January as the coronavirus spread. Numbers supplied by a UBS research note that includes official Chinese data suggests ‌iPhone‌ sales fell 28 percent compared to the prior month, which is a larger than normal decline for that time of the year.

February sales numbers are expected to be "far worse" due to supply and demand issues related to the outbreak.

Apple has said it is continuing to monitor the coronavirus situation and will provide additional information during its next quarterly earnings call in April.

Related Roundup: Apple Stores

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10 More Apple Stores Reopen Across China, Other Stores Outside of Beijing Remain Closed

Apple has updated its website to indicate that it will reopen 10 more stores across China, following closures due to the coronavirus outbreak that originated in Wuhan.


The stores, listed below, will reopen on February 19 for limited business hours of 11 a.m. to 6 p.m., or 12 a.m. to 6 p.m. local time until further notice, as noted by iMore.

Chengdu
Dalian
Guangzhou
Quingdao
Shanghai
Apple reopened all five of its retail stores in the Beijing area on February 14, operating on similar limited hours.

Apple has yet to announce reopening dates for its other stores in mainland China, which remain listed as closed on its website due to the viral outbreak. Apple began working toward re-opening its corporate offices and contact centers in the country last week.

Reports suggest ongoing delays from the coronavirus outbreak in China will likely impact iPhone production, in particular its upcoming low-cost iPhone, and inventories of existing models could remain low until April or longer.

The coronavirus has infected more than 75,000 people, and there have been at least 1,870 deaths, primarily in China.


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Apple Stores in Beijing Screening Customers for Fever Amid Coronavirus Outbreak

As expected, Apple reopened its five retail stores in the Beijing area today as the Wuhan coronavirus outbreak in China continues.

In a video shared by CNBC senior correspondent Eunice Yoon, Apple employees can be seen checking the body temperatures of customers as they enter the store for signs of fever. Yoon says Apple is also limiting the number of customers allowed in the store at once, resulting in smaller crowds than normally seen.


The stores in Beijing have reduced hours of 11 a.m. to 6 p.m. local time. Apple's other stores in China remain closed until further notice.

There remains a lot of uncertainty regarding the coronavirus outbreak, which has resulted in extended shipping estimates for some Apple products and could impact the company's overall revenue this quarter. Apple operates over 40 stores in China, which represents less than 10 percent of its retail locations worldwide.


Apple recently provided its retail stores, authorized service providers, and carrier partners with an enhanced cleaning guide that recommends that demo Apple products be cleaned at least twice per day. The document, shared with MacRumors, contains best practices for using microfiber cloths as well as hand washing tips for employees.

Related Roundup: Apple Stores

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