Apple (AAPL) Updates Portfolio Despite Coronavirus Shutdown

Apple Inc. Price and Consensus

Apple Inc. price-consensus-chart | Apple Inc. Quote

Notably, the company recently announced that it will host its annual Worldwide Developers Conference, to be held in June, in an entirely new online format. Through this annual event, Apple usually showcases its new software and technologies to attendees and allows software developers to engage with the company’s engineers.

The need for quarantine and travel barriers is creating disruptions on the international business front. Coronavirus-related health concerns have already resulted in suspension of several conferences and public events, including Google’s Cloud Next summit, Microsoft’s MVP summit, and Adobe’s Adobe (NASDAQ:ADBE) Summit 2020.

Coronavirus Hurts Apple’s Prospects

Notably, the rapidly-spreading virus has severely impacted Apple iPhone sales, especially in China. Per China Academy of Information and Communications Technology data, quoted by Reuters, iPhone sales in China plunged 61% year over year in February 2020.

One of the biggest questions now is what the COVID-19 outbreak will mean for Apple’s most significant launch event of the year — its annual introduction of new flagship iPhone models — that usually takes place in September.

Notably, the COVID-19 outbreak has impacted Apple’s supply chain as well. Notably, the company’s iPhone assembling facilities were initially shut down outside Hubei (the epicenter of the coronavirus).

Apple has also been slow to ramp up production back to normal levels, which is impacting global iPhone supply, per a BBC report.

Nonetheless, a continued momentum in the Services segment, backed by strong App Store sales, and the robust acceptance of Apple Music and Apple Pay are expected to drive growth this year.

Moreover, the company’s wearables market domination is expected to continue in 2020 owing to the strong adoption of AirPods and Apple Watch. The solid uptake of Apple Watch Series 5 is helping the iPhone maker strengthen its presence in the personal health monitor space.

Zacks Rank & Stocks to Consider

Currently, Apple carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader computer and technology sector are Garmin Ltd. (NASDAQ:GRMN) , Applied Materials, Inc. (NASDAQ:AMAT) and Microsoft Corporation (NASDAQ:MSFT) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Garmin, Applied Materials and Microsoft is currently pegged at 7.4%, 9.9% and 13.2%, respectively.

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