James Martin/CNET
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Apple was one of the first major tech manufacturers to warn investors the novel coronavirus pandemic, which has killed more than 150,000 people worldwide and infected more than 3.2 million, would impact its business. Now we’re learning how much.

The iPhone maker eked out a rise in sales and profits during its second quarter, even as the novel coronavirus took a toll on its operations. Still, Apple didn’t provide guidance, indicating it may not yet have a handle on the full impact the disease may have on its business. 

Apple’s hardware business has suffered more than other parts of company as the coronavirus spread across the globe. In February, Apple warned sales would be impacted, and sales of Macs and iPads have fallen. The company’s flagship iPhones business has taken the biggest hit, with sales dropping 7% from a year ago to $28.9 billion.

Apple’s services and wearables segments, which include Apple Arcade and AirPods, notched all-time record quarters. As more people sit at home, they’re seeking out services like Apple TV Plus and buying more games in the App Store.


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“When you consider all the ways COVID-19 has touched Apple, our customers and the way we work, this may not have been the quarter it could have been absent this pandemic,” Apple CEO Tim Cook said Thursday during a call with analysts. “But I don’t think I can recall a quarter where I’ve been prouder of what we do, or how we do it.”

Apple’s financial disclosures are just the latest example of how the coronavirus pandemic has ravaged the world economy. Broadly, more than 30 million Americans to file for unemployment while the US economy shrank nearly 5% between January and March. 

In February, Apple warned that the COVID-19 outbreak in China would cause it to miss its projections for revenue in the March quarter. Its devices are assembled in China, and factory closures hurt its ability to ship orders to customers. Cook on Thursday said that production got back to normal levels at the end of March.

Along with production, Apple has been impacted by lower demand for its gadgets. It has closed all of its stores outside Greater China and has moved its Worldwide Developers Conference, typically held each June, online only. The event, one of its biggest of the year, is where the company introduces its newest software features for its iPhones, Macs and various other devices. At the same time, Apple has taken steps to help health workers and others through the crisis. The company has donated millions of dollars, over 30 million masks and 7.5 million face shields to help combat the coronavirus. 

Phone woes

The coronavirus has been hitting other companies in the tech industry. Phone sales this year are expected to drop to their lowest level in a decade as consumers hold off on purchases. Earlier this week, Samsung said it expects near-term phone and TV sales will “decline significantly” because of store closures and other economic issues related to the coronavirus. Qualcomm, the world’s biggest wireless chip maker, warned earlier this week that it expects a steep drop in global phone shipments, but it did see some bright spots. 5G phone shipments should be just as strong this year as the company earlier predicted, and most handset makers are on track with their launches.

All told, Apple tallied $2.55 per share in profits on $58.3 billion in sales during its second fiscal quarter, which ended March 28. Those results were up from $2.46 a share and $58 billion the same time a year ago. They also were well above average analyst estimates from Yahoo, which pegged the company’s profits at $2.28 per share from $54.7 billion in sales.

Apple shares, which have been essentially flat so far this year, fell less than 1% in after-hours trading. The company is valued by investors at nearly $1.3 trillion.

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