Virus impact: 5G devices likely to be delayed

CHENNAI: The new coronavirus triggered lockdown in China, unless lifted in the next couple of weeks, could impact supply of smartphones and personal computers to India and the rest of the world significantly. Some analysts predict smartphone shipments to India could drop by 50% and supply of PCs by 20%.India’s smartphone market was 148 million units last year, sales driven largely by made-in-China phones. China has restricted business resumption to limit the spread of the coronavirus. Businesses in tier I cities including Beijing, Shanghai, Shenzhen and Guangzhou have delayed employees’ return from their Chinese new year break to February 9 for now. Resumption of production could be delayed further if the spread of the virus accelerates.“In an extraordinary situation, phone manufacturing in India could get impacted due to lack of parts availability,” a phone maker in Sriperumbudur told TOI.If the lockdown extends for more than two weeks then we will see a huge impact, said a representative for Xiaomi India. A PTI report said that Chinese smartphone brand Poco has one month of stock of mobile phones for sale in India.A spokesperson for Xiaomi India said, “We have not seen any delay or loss of shipments, as we have already imported our smartphone components in advance as those dates clashed with the Chinese year. However, if this current situation of lockdown extends for over a week or two then we will see a huge impact. Though we do not import components, our vendors and manufacturers are forced to look at alternative markets like Vietnam, US and Japan for supplies, as China is affected due to this epidemic.”Analysts at research firm Canalys wrote in a note: “Canalys had forecast a 7% decline in smartphone shipments between Q4 2019 and Q1 2020 and 8% fall in PCs. But given the current available information, we are dramatically revised our forecasts to a 40% to 50% drop for smartphones and 20% drop for PCs with a proviso that the situation improves to pre-outbreak levels by the end of February.”The Canalys report also said that “vendors that rely on offline sales such as Huawei , Xiaomi, Oppo and Vivo will be affected directly.” New product launches such as 5G devices are also likely to be delayed. “It will take time for vendors to change their product launch roadmaps in China which is likely to dampen 5G shipments in 2020,” the report said.Prior to the outbreak component makers were maintaining production at a minimum during the Chinese new year holidays. But, several factories in Zhejiang and Jiansgu of Hubei province are shut. Apple has temporarily closed its retail stores in China and the expectations is that many others might follow suit.