Apple’s Tim Cook Sees Minor Supply Chain Changes in Wake of Virus

(Bloomberg) -- Apple Inc. Chief Executive Officer Tim Cook suggested the iPhone maker wouldn't make any quick moves out of China in light of interruptions due to the coronavirus and called the situation a “temporary condition.”

“We're talking about adjusting some knobs, not some sort of wholesale, fundamental change,” he said in an interview aired Friday on Fox Business.

Apple's China-focused supply chain is facing two major tests -- first from a trade war between the U.S. and China and more recently from manufacturing outages spurred by the spread of the virus across the world's most populous nation.

Read more: Apple Outlook Cut Renews Questions About China Over-Reliance

Apple scrapped its March quarter revenue guidance recently, citing iPhone production constraints and closed stores in China due to the coronavirus. On Friday, Cook was asked if the disruption would bleed into the June quarter. “We're still in February, there's reason for optimism, but we'll see,” he said.

The Apple supply chain is “relatively more important in China,” he said, but noted that he'll be watching the coronavirus situation unfold in Korea and Italy since Apple has suppliers and businesses there as well. “It's very important to see what happens there,” he added.

Cook also defended a supply-chain strategy that he has led for years. “We've worked through earthquakes, tornadoes, fires, floods, tsunamis, SARS, so we've had a long list of things, and the operational team is very deep at working through these,” the CEO said. “So the question for us after we get to the other side, was the resilience there or not and will we need to make some changes?”

“It will take some time, but by and large, I think this is a temporary condition, not a long term of thing,” he added.

To contact the reporter on this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Robin Ajello

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