Apple Takes Leadership Role in COVID-19 Response
Apple recently announced further steps in response to the spread of COVID-19. Bottom line: we applaud the leadership role Apple has assumed in taking these steps despite the near-term negative impact on revenue. Our takeaways:
The impact of retail closings:
- Apple is closing all its retail stores globally until March 27.
- We estimate that Apple retail accounts for 8% of revenue.
- Closing all stores for two weeks outside of China adds about 1-2% revenue headwind to the March quarter.
- Some of the sales that would have happened in-store will shift online, which will somewhat offset the negative impact.
Office employee work options:
- Similar to many companies, Apple is moving to “flexible work arrangements worldwide outside of Greater China,” allowing employees to work remotely if their job allows.
Relief for Apple Card holders:
- Allowing Apple Card holders to skip their March payment without penalty.
- Apple is matching employee donations two-to-one related to the COVID-19 response.
- Apple is doing it right, winning the long game in the hearts and minds of consumers by treating them with compassion.