Corona Virus : Impact on Tech Companies

Corona Virus : Impact on Tech Companies

The spread of this deadly coronavirus has shocked the technology industry. From the iPhone to LCD TVs, many of the world’s consumer technologies are either made in China or depend on parts made in China. The United States is the largest manufacturer of mobile phones, computers, and televisions in the world. It exports billions of dollars worth of goods every year.

Since offices and factories are no longer in use across the country, coronaviruses have a clear and direct impact on productivity. Depending on the speed at which the virus continues to spread, global supply chains can be severely affected, resulting in product delays and bottlenecks, analysts say.

Since 2013, China has become the largest smartphone market in the world, producing companies such as Xiaomi, Oppo, Vivo, and Huawei. IHS analyst Markit Gerrit Schneemann wrote in an e-mail that although the coronavirus threat is starting to disappear soon, it may take weeks before the Chinese phone manufacturers resume their delivery and logistics activities. This month, home smartphone sales may fall sharply and are not expected to recover until March. But the outbreak wasn’t contained until the following weeks.

Snowman wrote: However, this situation cannot be excluded for more than one month. In the long term, the recovery of the value chain will take longer, affecting not only China and the Asia-Pacific region but also global supply.

A Huaway spokesperson said that while the coronavirus was monitoring the situation, its impact on the supply chain was limited. At the beginning of this month, the company resumed production of consumer goods and transport vehicles after a temporary stoppage. The employees of the company in the province of Hubei work from home. Doctors in Hubei province have diagnosed hundreds of cases of the coronavirus. The Company also prepared the required documents for the 11. In February, the annual developer conference in Shenzhen was postponed.

In recent years, other companies such as Samsung, Google, Sony, and others have gradually relocated their smartphone factories from China to low-wage countries such as Vietnam or India. However, these companies are still dependent on China for the supply of many of the components used in their smartphones, such as sensors or glass screens.

Apple’s supply chain remains closely linked to China. According to Reuters, only about 10 percent of Foxconn’s factories in Zhengzhou and Shenzhen (with Apple’s mounted iPhone) resumed operations on Monday. These plants make up the majority of the iPhone’s global supply chain, and further delays may affect global deliveries.

Apple’s on 1. In February, all shops, business offices, and contract offices in mainland China were closed for a very thorough review. The opening of Apple’s store in China is scheduled for November 9th. February throughout the country, but it now seems that these reopenings are uncertain. Apple is expected to launch the iPhone SE2 at a lower price in March. But the salesmen said he might be delayed.

China also produces about half of the LCD panels used in televisions, laptops, and computer monitors. In Wuhan, the capital and commercial center of the coronavirus epidemic, there are five factories producing LCD screens. These factories were closed after the Chinese authorities closed the entire city last month. David Hsieh, the analyst at IHS Markit, said in an e-mail that the capacity of these plants could double by February. This could force the Chinese producers to increase their prices in response to the shortage.

According to UploadVR, Facebook reported last week that the coronavirus will affect the production of Oculus Quest helmets. The company has recently stopped accepting new orders for stand-alone VR helmets.

For fear of the virus, several companies refused to participate in this year’s Mobile World Congress (MWC) in Barcelona. The CMM is rightly regarded as the noisiest event of the year in the mobile phone industry. Companies such as Intel, Sony, ZTE, LG, and NVIDIA have canceled their participation. Others have their plans for the meetings to be held on the 22nd. Early February, reduced. The Chinese multinational electronics group TCL has canceled its next press conference at the MWC, but will still attend and announce new equipment. Samsung’s participation in global technology events will also be limited, and many of its Korean and American employees will prefer to stay at home.

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Huawei is still planning to participate, but her staff will have to live isolated in China for some time. The organizers of the meeting announced on the 9th. On February 2, they will ban all travelers from Hubei Province, China, and require all other visitors to prove that they have spent at least 14 days outside of China, which is a latency period for the disease. The VGV participants can count on regular temperature monitoring and instructions without having to shake hands.

Corona Virus : Impact on Tech Companies Source: https://www.cgdev.org/.

The financial influence of various technology companies
  • Apple Inc. (AAPL), -2.44% of the shares are not in line with the financial projections for the second quarter, as production in China slowed down or stopped as a result of the Kovid-19 epidemic. The company said Monday in a statement: Work is resuming nationwide, but we’re slower than usual. Apple Corp. generates about 15% of its sales from China and many of its products are made in China.
  • Microsoft Corporation (MSFT), -4.21% warned that they would not meet their forecast for the third fiscal quarter because of VIDOC-19. Microsoft announced in late January that it expects its More Personal Computers division to achieve sales of between 10.75 and 11.15 billion U.S. dollars in the third quarter, although the figures are outside the normal range to reflect the uncertainties related to the health situation in China. Despite the strong demand for Windows, which meets the company’s expectations, the supply chain is normalizing more slowly than expected. Microsoft has stated that all other management components will remain unchanged for the third quarter.
  • Best Buy Inc. has -9.65%, which buys a large number of consumer electronics products in China. The company stated that it believes most of the effects of the coronavirus will occur in the first half of this year. We, therefore, believe that this is a relatively short-lived failure that will not affect our strategy and plans for the long term. We address the first quarter, CFO Matt Bilunas said in his statement. And the overall annual forecast reflects our current best estimate of the impact.
  • Mastercard Inc -4.18% said this was due to the increase in cross-border travel and, to a lesser extent, COWID-19’s cross-border e-commerce.
Conclusion:

The online entertainment industry is a technology sector that has not tried to contain the epidemic. As millions of Chinese citizens leave work and go home for a few days, many turn to video games, films, and social networks for entertainment. Balloon Weekly reported that playtime and in-game purchases in China have increased dramatically since January. But if the virus continues to spread and threatens one of the largest economies in the world, the benefits may be short-lived.

Useful resources :

https://www.who.int/emergencies/diseases/novel-coronavirus-2019

https://www.cdc.gov/coronavirus/2019-ncov/prepare/prevention.html

About the Author: prateek

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