Apple iPhone chip supplier lowers guidance due to the coronavirus

Key Points
  • Qorvo, which makes radio chips for Apple's iPhones, lowered its fourth-quarter revenue expectations due to the coronavirus outbreak. 
  • The company said the fast-spreading virus has impacted demand and the smartphone supply chain more than anticipated.
  • Apple has already said it doesn't expect to meet its quarterly revenue forecast because of the virus. 
People wearing face masks walk in front of an Apple store at a shopping mall, as the country is hit by an outbreak of the new coronavirus, in Beijing, China February 18, 2020.
Carlos Garcia Rawlins | Reuters

Qorvo, a radio frequency chip supplier for Apple's iPhones, lowered its fourth-quarter revenue expectations to $770 million on Tuesday, down from its predicted range of $800 million to $840 million in late January. 

"The novel coronavirus (COVID-19) has impacted the smartphone supply chain and customer demand more than anticipated," Qorvo said. "The full impact of COVID-19 remains difficult to forecast given the uncertainty of the magnitude, duration and geographic reach of the outbreak."

Qorvo's fourth-quarter results are expected on May 5.

Apple is expected to announce a new low-cost iPhone sometime this spring, possibly named the iPhone SE2. It typically announces its new flagship iPhones in September.

In mid-February, Apple said it didn't expect to meet its quarterly revenue forecast due to lower iPhone supply globally and weak Chinese demand. Fifteen percent of its revenue comes from the region. Apple previously predicted net sales of $63 billion to $67 billion for its fiscal second quarter, though it didn't provide a new forecast. 

On Feb. 28, Apple CEO Tim Cook said he believes that China is getting coronavirus under control. "When you look at the parts that are done in China, we have reopened factories, so the factories are working through the conditions to open. They're reopening," he said. 

On Tuesday, Foxconn Technology, which builds Apple's iPhones, said production has reached 50% of seasonal required capacity and that, based on its current schedule, it expects to reach "full seasonal capacity by the end of March." But Foxconn warned that "there are still plenty [of] uncertainties which we can not quantify the potential impact [of] on the full year." 

Qorvo is among the latest among tech companies to feel the impact from the deadly coronavirus outbreak that's sickened at least 91,300 people.

PC makers have also indicated this cycle will be impacted by the coronavirus. HP warned during its fiscal first-quarter earnings call last week that production restraints may delay business computer upgrades to the second half of 2020. Lenovo also warned that supplies would be constrained in Q1.

Microsoft, which relies on sales of Windows to those computer makers, said its More Personal Computing Unit would miss segment guidance during the third fiscal quarter, noting that "Windows OEM and Surface are more negatively impacted than previously anticipated."

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Tech will recover from coronavirus outbreak, analyst says
Tech will recover from coronavirus outbreak, analyst says