Apple Inc (AAPL)

[sokol]

Yesterday’s announcement is potentially very serious for AAPL. No one knows the extent of the virus problem except we know one thing. It is not over. First, Apple has derived a good percentage of its revenue from sales of its products in China, and second its supply of products has been disrupted. Just like a recession, there is a psychological response to a large scale virus outbreak. You can re-open stores and businesses in China, but you cannot force people to come. People will return when they think it is safe to return. Apple has opened stores, but customers have not decided to return. You can certainly understand why - especially in China - when the government responds the way it has. Seizing people with the suspected virus and throwing them in an enclosed container in the back of a pickup is one vivid example that stands out in the minds of everyone. The government’s response has made the problem worse, both literally and figuratively. Even if the virus begins to wane, the psychological impact will remain for a while. It is not likely to go away over night.