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Apple’s Tim Cook Calls Coronavirus a ‘Challenge’ at Shareholder Talk

Mark Gurman

(Bloomberg) -- Apple Inc. Chief Executive Officer Tim Cook called the coronavirus a “challenge” for the iPhone maker during a pep talk for shareholders at the company’s annual meeting.

The effects of the virus, which have closed factories and stores throughout China, pose significant issues for the technology giant. Apple produces hundreds of millions of devices each year in China. Earlier this month, the company said it wouldn’t meet its revenue forecast of more $63 billion for the current quarter, citing iPhone supply constraints and lost retail sales in China.

Apple has since re-opened about 30 of its 42 stores in China. Suppliers and mass assembly partners are also slowly coming back up to speed, but some analysts have said the fallout could spill into the quarter ending in June.

In prepared remarks Wednesday at Apple’s shareholder meeting at Cupertino, California, Cook said annual revenue from wearables such as the AirPods and Apple Watch compares with that of Marriott International Inc. plus Visa Inc. -- more than $40 billion. Apple reported $10 billion in fiscal first-quarter revenue for its wearables, home and accessories unit.

Answering questions from the audience, Cook said for the first time that Apple would open its online store in India this year, with the first retail stores opening in the country in 2021.

He also made his first public comments about the company’s rejection of the U.S. government’s request to unlock iPhones belonging to the shooter behind the December 2019 attack that killed three people in Pensacola, Florida. “Don’t think we have something that we’re not giving,” he said, adding that Apple wouldn’t create a backdoor to break into its devices.

On a much lighter note, Cook was asked why the company didn’t acquire the rights to the show “Friends” for its TV+ streaming service. The CEO said the company is focused on developing original shows rather than buying old offerings.

Cook’s comments at shareholder meetings sometimes can hint at future products. At the 2019 meeting, Cook said there was “long, great road map of fantastic” AirPods ahead. New AirPods launched just weeks later, followed by the AirPods Pro in October.

The top Apple executive didn’t specify any future products, but the company is working on new iPhones with 5G for later this year, Bloomberg News has reported. It’s also planning to launch a virtual-reality headset as early as 2021. It’s unclear whether those plans may be affected by the coronavirus outbreak.

Shareholders re-elected Apple’s board, which includes Cook and former U.S. Vice President Al Gore.

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, Andrew Pollack, Mark Milian

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