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Money News

Apple closely watching coronavirus outbreak in South Korea, Italy - CEO

FILE PHOTO: Apple's CEO Tim Cook speaks with Singapore Paralympian Theresa Goh (unseen) at the OCBC Aquatic Centre, Singapore Sports Hub December 12, 2019. REUTERS/Edgar Su

(Reuters) - Apple Inc AAPL.O is closely watching how the coronavirus outbreak is unfolding in South Korea and Italy, where the company has suppliers, Chief Executive Officer Tim Cook said in an interview.

Apple counts major Korean display makers Samsung Electronics Co Ltd 005930.KS and LG Electronics Inc 066570.KS among its suppliers. It also sources chips from a factory in Italy run by Franco-Italian chipmaker STMicroelectronics STM.BN, according to its most recent supplier list.

Cook told Fox Business Networks that Apple had re-opened 80 percent of its stores in China. He also said that iPhone factories in China had restarted and were in “phase three of the ramp mode.”

“It will take some time, but by in large I think this is a temporary condition, not a long-term kind of thing,” Cook said.

Asked if Apple would move manufacturing out of China to countries such as Vietnam or Cambodia, Cook said the company’s supply chain was global and that the company considered speed to markets and engineering skills in addition to cost. He also said Apple’s supply chain managers were examining how resilient to the coronavirus shock the company’s supply chains were.

“And so the question for us after we get on the other side will be, was the resilience there or not and do we need to make some changes,” he said. “My perspective sitting here today is that if there are changes, you’re talking about adjusting some knobs, not some sort of wholesale fundamental change.”

Apple last week said it would not meet its guidance for the quarter ending in March and that it would experience supply chain shortages. Cook said he did not know whether the coronavirus would affect the quarter ending in June.

On Wednesday at Apple’s annual shareholder meeting, Cook said Apple would open its first retail store in India.

Cook was interviewed in Alabama, where he had traveled to announce a program to teach computer coding in schools.

Reporting by Munsif Vengattil in Bengaluru and Stephen Nellis in San Francisco; Editing by Shounak Dasgupta and John Stonestreet

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