Apple’s China iPhone sales dropped in January as virus emerged

Apple Inc.’s China iPhone sales dropped in January as the coronavirus began to spread, according to an analysis of government data on Monday.

Demand for the product fell 28% compared with the previous month, a bigger decline than usual for that time of year, according to a UBS research note citing official Chinese data.

“February numbers are likely to be far worse due to both supply and demand issues related to the virus outbreak,” UBS analyst Timothy Arcuri wrote in the note.

Apple recently pulled its revenue forecast for the March quarter, saying the virus had stunted sales and slowed production. The company also closed all of its 42 physical stores in mainland China due to the outbreak. It is beginning to reopen them now.

The situation is so fluid that Apple hasn’t given a new revenue forecast, Arcuri said. The pace of recovery in the company’s June quarter “is more dependent on the demand side – which is very hard to predict,” the analyst added.

Overall January smartphone shipments in China slumped 37% year over year, according to numbers from the China Academy of Information and Communications Technology. UBS’s Arcuri said iPhone sales climbed 5% in the same period, thanks to its online stores and easier comparisons to the previous holiday period which was marred by trade war tensions.