With the fate of Japan suppliers in flux in the aftermath of earthquakes, tsunamis and a nuclear meltdown, Apple is sticking with its partners in the country.
On Apple's earnings conference call, Tim Cook, operating chief, was naturally asked about the supply chain outlook in Japan. Cook told conference call attendees that the company's revenue is set to be US$200 million lower for the upcoming third quarter due to the earthquake in Japan — a loss that has been factored into Apple's fiscal outlook, Cook added.
Despite the projected revenue loss, Japan's natural disaster hasn't had any measurable impact on the company's fiscal second quarter.
Remarkably, Apple's Japanese suppliers are still delivering.
"Regarding our global supply chain, as a result of outstanding teamwork and unprecedented resilience of our partners, we did not have any supply or cost impact in our fiscal Q2 as a result of the tragedy, and we currently do not anticipate any material supplier cost impact in our fiscal Q3," Cook said, adding that Japanese suppliers provide Apple with "hundreds of thousands" of LCDs, optical drives, NAND flash, DRAM and base materials including resins, coatings, and foil that are part of the production process.
Despite the positive feedback, Cook cautioned that the country wasn't yet out of the woods.
"So, while we do not anticipate — currently anticipate — any material impact to our component supply or costs in our fiscal Q3, we do need to caution everyone that this situation remains unpredictable given recent aftershocks, the uncertainty about the nuclear plant, and potential power interruptions," Cook warned.
"Further, there are some supply risks that are beyond the current quarter. And although we know of no issue today that we view as unsolvable, the situation is still uncertain and there's obviously no guarantees. For this reason, it's difficult to predict whether the issues created by the tragedy would impact revenues beyond Q3," he added.
Cook said that Apple will update the market on the situation at its next conference call in July.
Luke Hopewell contributed to this story.