Microsoft on Wednesday revealed that it will miss third-quarter sales expectations for Windows licenses and Surface devices due to the impact of coronavirus on production.
The company specified that the coronavirus --- which has now infected more than 80,000 people and led to at least 2,800 deaths --- is causing the supply chain to move slower than expected. Investors were warned that Windows and Surface sales would suffer this quarter as a result of those production delays.
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“Although we see strong Windows demand in line with our expectations, the supply chain is returning to normal operations at a slower pace than anticipated at the time of our Q2 earnings call,” Microsoft wrote in a press release (opens in new tab).
The company goes on to say “we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.”
In an earnings call last month, Microsoft said it expected to achieve between $10.75 and $11.15 billion in revenue for its personal computing segment, a range wider than normal due to uncertainty around the health situation in China. Microsoft did not provide a new revenue guidance.
Microsoft Azure, the company's growing cloud service, isn't affected by the coronavirus.
Coronavirus' impact on tech industry
Microsoft isn't the only company affected by the coronavirus. Its arch rivals Apple will reportedly move production for the upcoming iPad Pro out of China. Apple similarly said it would cut sales projections because of the ongoing outbreak.
We've heard from multiple laptop vendors that the coronavirus is causing serious delays in production, and even pushing back product releases.
Among the first affects the coronavirus had on the tech industry was the cancellation of Mobile World Congress, the world's largest smartphone convention originally set to take place this week in Barcelona.
More recently, developers and companies have pulled out of the PAX East gaming convention (although the event is still a go), and Computex -- one of the largest laptop shows -- is encouraging all attendees to wear face masks should the Taipei-based event go forward in June.
The coronavirus is spreading throughout the world at a concerning rate. We strongly recommend visiting the Centers for Disease Control and Prevention website (cdc.gov) to learn more about the virus, including ways to protect yourself.