The economy of smartphone and mobile content creation is suffering due to Coronavirus concerns.
First let’s clarify the facts. The Coronavirus epidemic is an international emergency declared by the World Health Organization. In these lines you will not find any information on this event and we recommend that you inform yourself correctly on the websites of the institutions responsible for safeguarding international public health. We at TMS do not intend to feed the fear index in any way, but we simply investigated the situation of the world economy linked to the smartphone. Of course, the event that made us start this little report is the cancellation of the Mobile World Congress in Barcelona which took place a few days ago, an event for which you can see a BBC insight here.
After Barcelona shock.
The cancellation of Barcelona event brought enormous economic damage to GSMA, the company that manages the fair, with lost earnings of half a billion euros and an abrupt interruption of the work of an induced of 14,000 workers. On the other hand, the Catalan fair had already been weakened by defections of some giants (and consequently large investors) of the smartphone world who had canceled their presence in Barcelona following the increase in cases of coronavirus and the impossibility, as they have recited some press releases, to ensure the safety of the workers of the companies and customers during the event that was to open on February 24, 2020 to end on the 27th. From that moment on, various analyzes of the smartphone market came out which highlighted how to prepare for a disastrous 2020. The reason is simple: most of the hardware and components of smartphones in the world are produced in China and, at the moment, suffers from the fact that, due to this emergency, many factories in this world are closed or they are producing very little.
Another report on the situation of the smartphone market, created by the Guardian, highlights a serious situation in the sector of the manufacture of smartphone components and speaks of impressive data. In fact, smartphone production in the first quarter of 2020 is down 12%. Large suppliers such as Foxxcom, a company that supplies Apple, are reported in great difficulty and in fear of Coronavirus. In particular, reference is made to the fact that in Foxxcom factories there have always been problems of correct ventilation of the rooms, a factor that increases the risk of contagion. In this regard, then, TMS had direct sources from the assistance market on smartphones that could soon be in short supply in Europe some components such as iPhone batteries.
The sales? Down.
TMS also received a leak from an important consumer electronics retailer in the Italian market which, to its executives, reported that it expected a 30% drop in smartphone sales, a figure believed to be established not in the presence of a psychosis shock on the virus. If this happens, the fall could reach 50%. The furniture market, therefore, is on its knees and this will inevitably delay all new releases and also penalize the induced activities of the world small and large industries that deal with supports, lenses, gimbal, accessories, handhelds and other objects that help mobile content creator. Of course logistics will also play its part which, given the difficulties of goods to overcome the barrier of the Chinese border, will increase costs and therefore the final prices for the purchase.
A complicated situation, therefore, to be kept under control.