The Wuhan novel coronavirus outbreak has already affected the technology industry, with Google earlier announcing that their offices in mainland China, Hong Kong, and Taiwan have been temporarily closed. Meanwhile, Apple has also shut down corporate offices and Apple Store in mainland China. At the moment, there are 42,776 confirmed cases of the virus, with 1,013 deaths recorded across 25 countries.
But things are seemingly getting worse, according to a report from Reuters. China’s smartphone sales for the first quarter of 2020 may drop by up to 50%, with retail shops closing and the production of smartphones still halted due to the outbreak. The forecast was made by research firm Canalys, who also expects product launches and other large events that are critical to the industry to be delayed, or even cancelled:
“Vendors’ planned product launches will be canceled or delayed, given that large public events are not allowed in China.”
Another research company, IDC, is slightly more optimistic, with just a 30% drop in sales for Q1 2020. Still, perhaps this means that plans for product launches need to be altered—a move which will likely affect commercial 5G plans. It’s worth noting that 2020 is the year that could be the year of 5G, and with China being such a major manufacturing hub, progress is bound to be affected.
But the largest smartphone vendor from China, Huawei, says that they aren’t affected. Instead, their processes are “running normally”, although that may also be down to the fact that Huawei outsources some of its manufacturing, which is a similar story to other major players such as Oppo.
Conversely, Bloomberg reports that employees of Foxconn—one of Apple’s largest assemblers—were told come back to work on the 10th of February, which was supposed to be the day the manufacturers resumed regular operations. And Wedbush Securities has reportedly stated that 3–5 million iPhones could be delayed from March till June due to supply chain issues.
It’s not great reading for the technology sector—if the predictions that China’s smartphone sales are true, Apple is likely to feel the pinch. That’s because the American company considers the China, Taiwan, and Hong Kong to be its 3rd-largest market.
And with companies also placing restrictions on employee travel—especially within the Asian region—we’ll probably see things slow down for a bit.