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Apple's (AAPL) U.S. Stores to Remain Shut Amid Coronavirus Woes
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Apple (AAPL - Free Report) is likely to keep its U.S. retail stores closed until early May due to the continual spread of the coronavirus (COVID-19) pandemic.
Per a Bloomberg report, which cited an internal memo from Deirdre O’Brien, Apple’s senior vice president of people and retail, the iPhone-maker will also extend remote working facilities for its employees through the same time frame.
Notably, the United States now reels under the burden of maximum coronavirus cases in the world, per the Johns Hopkins University data. Total infected cases registered in the country as of now are 245,540. According to White House health adviser Dr. Anthony Fauci, the death toll can surge to 200,000 with millions contracting the infection.
Apple operates approximately 500 stores worldwide, of which 270 are located in the United States. The company shuttered 458 stores outside Greater China on Mar 13 to slow down the spread of the coronavirus. Notably, 52 stores in mainland China, Hong Kong and Taiwan are currently open.
Coronavirus Nips Apple’s Near-Term Prospects in the Bud
Apple’s shares have been down 16.6% on a year-to-date basis, primarily due to the coronavirus impact. Management in mid-February stated that it might not be able to meet its quarterly revenue expectations issued on Jan 28, 2020 due to iPhone’s supply-chain interruption. Earlier projections for this tech giant’s second-quarter fiscal 2020 revenues were between $63 and $67 billion.
The coronavirus pandemic with its epicenter in Wuhan, China also dented iPhone’s demand. Citing data compiled by the China Academy of Information and Communications Technology, Reuters reported that Apple sold 494,000 iPhones in China during February, reflecting a 61% drop from 1.3 million in the year-ago period.
While factories in China resumed operations, Apple is facing a bleak demand scenario as the nations around the world enforce social distancing.
Can Services & Non-iPhone Devices Drive Growth?
Apple currently has more than 480 million paid subscribers across its Services portfolio. App Store continues to draw the attention of prominent developers from around the world, helping the company offer attractive new apps that boost traffic.
Notably, Apple Music currently has more than 60 million paid subscribers. Moreover, it offers more than 60 million songs with world class music experts and taste makers curating thousands of playlists and daily selections across 115 countries.
In the first quarter of 2020, Services (13.8% of sales) revenues grew 16.9% from the year-ago quarter to $12.72 billion.
Moreover, Apple’s expanding non-iPhone portfolio with the announcement of new iPad Pro and new MacBook Air upgrades is a key catalyst.
Further, the company recently received a waiver from the U.S. Trade Representative (USTR), which relieved its smartwatch from tariffs imposed on exports by China.
Notably, a solid uptake of Apple Watch also helped the company bolster its presence in the personal health monitoring space. Moreover, Apple is currently dominating the wearables and hearables markets owing to a strong adoption of Watch and AirPods.
Per IDC data, the global wearables market is expected to grow 9.4% in 2020, reaching 368.2 million shipments. Apple is expected to lead the Watches sub-segment owing to advanced fitness and health-tracking features.
Although supply-chain disruption due to the COVID-19 outbreak is expected to mar Apple’s prospects in the near term, we believe, non-iPhone portfolio strength and the growing Services business bode well for the long haul.
Zacks Rank & Stocks to Consider
Apple currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Avid Technology , OSI Systems (OSIS - Free Report) and HP (HPQ - Free Report) . While Avid sports a Zacks Rank #1 (Strong Buy), both OSI and HP carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Avid Technology, OSI Systems and HP is currently pegged at 15%, 12.5% and 2%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Apple's (AAPL) U.S. Stores to Remain Shut Amid Coronavirus Woes
Apple (AAPL - Free Report) is likely to keep its U.S. retail stores closed until early May due to the continual spread of the coronavirus (COVID-19) pandemic.
Per a Bloomberg report, which cited an internal memo from Deirdre O’Brien, Apple’s senior vice president of people and retail, the iPhone-maker will also extend remote working facilities for its employees through the same time frame.
Notably, the United States now reels under the burden of maximum coronavirus cases in the world, per the Johns Hopkins University data. Total infected cases registered in the country as of now are 245,540. According to White House health adviser Dr. Anthony Fauci, the death toll can surge to 200,000 with millions contracting the infection.
Apple operates approximately 500 stores worldwide, of which 270 are located in the United States. The company shuttered 458 stores outside Greater China on Mar 13 to slow down the spread of the coronavirus. Notably, 52 stores in mainland China, Hong Kong and Taiwan are currently open.
Coronavirus Nips Apple’s Near-Term Prospects in the Bud
Apple’s shares have been down 16.6% on a year-to-date basis, primarily due to the coronavirus impact. Management in mid-February stated that it might not be able to meet its quarterly revenue expectations issued on Jan 28, 2020 due to iPhone’s supply-chain interruption. Earlier projections for this tech giant’s second-quarter fiscal 2020 revenues were between $63 and $67 billion.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
The coronavirus pandemic with its epicenter in Wuhan, China also dented iPhone’s demand. Citing data compiled by the China Academy of Information and Communications Technology, Reuters reported that Apple sold 494,000 iPhones in China during February, reflecting a 61% drop from 1.3 million in the year-ago period.
While factories in China resumed operations, Apple is facing a bleak demand scenario as the nations around the world enforce social distancing.
Can Services & Non-iPhone Devices Drive Growth?
Apple currently has more than 480 million paid subscribers across its Services portfolio. App Store continues to draw the attention of prominent developers from around the world, helping the company offer attractive new apps that boost traffic.
Notably, Apple Music currently has more than 60 million paid subscribers. Moreover, it offers more than 60 million songs with world class music experts and taste makers curating thousands of playlists and daily selections across 115 countries.
In the first quarter of 2020, Services (13.8% of sales) revenues grew 16.9% from the year-ago quarter to $12.72 billion.
Moreover, Apple’s expanding non-iPhone portfolio with the announcement of new iPad Pro and new MacBook Air upgrades is a key catalyst.
Further, the company recently received a waiver from the U.S. Trade Representative (USTR), which relieved its smartwatch from tariffs imposed on exports by China.
Notably, a solid uptake of Apple Watch also helped the company bolster its presence in the personal health monitoring space. Moreover, Apple is currently dominating the wearables and hearables markets owing to a strong adoption of Watch and AirPods.
Per IDC data, the global wearables market is expected to grow 9.4% in 2020, reaching 368.2 million shipments. Apple is expected to lead the Watches sub-segment owing to advanced fitness and health-tracking features.
Although supply-chain disruption due to the COVID-19 outbreak is expected to mar Apple’s prospects in the near term, we believe, non-iPhone portfolio strength and the growing Services business bode well for the long haul.
Zacks Rank & Stocks to Consider
Apple currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Avid Technology , OSI Systems (OSIS - Free Report) and HP (HPQ - Free Report) . While Avid sports a Zacks Rank #1 (Strong Buy), both OSI and HP carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Avid Technology, OSI Systems and HP is currently pegged at 15%, 12.5% and 2%, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>