Most of the iPhone is assembled in two factories – Foxconn and Pegatron – in Henan in China. They found a large number of cases of coronavirus. Wuhan, where the outbreak of the new virus began, is located 500 kilometers from the factories. This distance does not guarantee protection against illness. The expert told why production would not be closed and transferred to another country, and losses for Apple would be minimal.
The first to close factories was reported by Bloomberg. At the same time, Foxconn was assured of measures to fulfill its international obligations. Apple has not yet commented on the situation.
Epidemics such as bird flu, coronavirus and others have one thing in common – they come in waves. According to Ben Airis, editor-in-chief of BNE-Intellinews, the first wave usually lasts about five to six months. During this period, scientists usually manage to develop a vaccine against the virus, and people become more prepared for the second wave of the epidemic. Given the duration of the first wave, the threat to the factories is temporary.
It is almost impossible to transfer production to another place in such a short time. This will require a large investment of money, which from the point of view of commerce does not make much sense. Moreover, where will the company transfer its factories? Any country in Southeast Asia where labor is cheap, is now at risk from the coronavirus. In addition, the virus is very unpredictable.
The second point is the level of lethality of the coronavirus.
“If you look at the numbers, then we have about 4-5 thousand sick and about 100 dead. This is certainly bad and scares people. But compare coronavirus with Ebola. The current epidemic is not so deadly. A third of those infected died from Ebola, ”the expert observes.
Now the percentage of the population exposed to the virus is quite small. This means that most people will continue to lead a life in a more or less familiar rhythm for them. The only thing that Apple is likely to take is to ensure that all precautionary standards are followed in factories in order to minimize the risks of illness among workers.
Apple is hardly worried about the losses. According to Ben Ayris, the company has large-scale production around the world. Its sales consist not only of electronics manufactured by Foxconn and Pegatron. Losses are inevitable, but they are not catastrophic.
“Let’s draw a parallel between Aeroflot and Apple. The first canceled all its flights to China, but this is only one percent of the company’s total profit. Apple has roughly the same situation. Only their business is even more diverse, ”adds interlocutor.
An outbreak of a new type of coronavirus began in China on December 31. According to the latest data, 2019-nCoV in the PRC infected 4,515 people, of which 106 died.