Apple got off to a great start in 2020. 

Chief Executive Tim Cook lauded the company’s “blockbuster quarter” for the three months that ended in December 2019, in which the company posted market beating earnings and revenue. The iPhone 11 series appeared to be doing well, especially in China, one of the company’s most critical markets. 

On Jan. 29, a day after its earnings, Apple shares hit an intra-day high of $327.85, even after it gave wider-than-usual guidance for its March quarter. Investors felt content. 

At that point, the number of coronavirus cases in China stood at over 7,000 versus more than 80,000 on Monday.  

In early February, analysts reiterated their buy ratings on Apple’s stock and strong price targets. While acknowledging the outbreak of the coronavirus, they felt Apple could withstand it. 

“Overall, we see the coronavirus impact on AAPL as a dynamic that continues to gain in importance to the company, though we size the present impact to be relatively minimal, financially,” Deutsche Bank said in a note on Feb. 2, referring to Apple’s stock code on the Nasdaq.

Then the reality of its impact sank in. 

On Feb. 17, Apple said it did not expect to meet the revenue guidance for the March quarter of $63 billion to $67 billion. China was mostly to blame.

The coronavirus forced the annual Lunar New Year holiday to be extended. That meant Apple stores and the factories that make iPhones, run by Foxconn, remained shut for longer. Production wasn’t happening and demand had waned. 

“We are experiencing a slower return to normal conditions than we had anticipated,” Apple warned. 

Even now, Taiwan’s Foxconn, the main company that assembles iPhones in China, is not at full capacity and not all of Apple’s retail stores in mainland China have opened. 

China accounts for nearly 15% of sales for the company but crucially, it is at the heart of iPhone production which will affect supply globally.

The bad news kept rolling in. On Monday, official Chinese government figures showed Apple shipped fewer than 500,000 iPhones in February, a 60% year-on-year decline.

“These are doomsday type of iPhone units and overall smartphone sales which are not surprising given the essential lockdown that most of China saw during the month of February with stores closed and the supply chain under massive pressure due to the coronavirus outbreak in the country,” Daniel Ives, analyst at Wedbush Securities, said in a note on Monday.

On top of that, there are concerns that Apple may not be able to launch new products on time, and that may include a rumored 5G-capable iPhone.

Since the record intra-day high, Apple shares have fallen nearly 19% that’s wiped off billions of dollars in value, even as the broader equity markets saw a violent sell-off. 

According to a Reuters poll, analysts are still predicting that Apple could potentially hit new record highs this year after a big rally in 2019. In fact, the current average 12-month price target on Apple’s stock is $333.57. If realized, it would represent a 25% rise from Monday’s closing price. It would also be a new record high for the stock. 

Given that the $333.57 figure is a 12-month price target, analysts say it could even be reached in 2021.

Getting there will be a lot harder than it seemed earlier in the year, however, particularly as the coronavirus spread has gone global. UBS warned in a note last week that demand impact is “likely to expand beyond China.” 

“We had moved some demand from March into June but given the broader impact, we now think the demand impact could continue into Jun,” analysts at the investment bank said.

UBS lowered its June quarter iPhone unit sales by an estimated 2 million, to 38 million units. It also reduced its earnings and revenue estimates for Apple for the fiscal year ending September 2020. 

But analysts still feel that the coronavirus is a near-term issue for Apple and that its long-term growth story remains intact.

Ives said the weak demand from China in the March quarter is a “shock event” that will be “short lived” with “normalized iPhone demand trends” to resume in the second half of the year around the world. The Wedbush analyst said the iPhone’s huge install base, pent-up upgrade demand, growing services business such as Apple music, and a potential new 5G iPhone, will be catalysts for the company. 

“With markets seeing an avalanche of selling pressuring triggering circuit breakers, we encourage investors to take a deep breath and focus on the tech winners for the next 5-10 years including Apple front and center,” Ives said.