Coronavirus set to derail smartphone industry in India by mid-March

New Delhi: The coronavirus outbreak which has hampered global tech giants’ 2020 plans leading to cancellation or postponement of global flagship conferences is set to hit supplies of smartphone components from China to India at least till the second quarter of this year.

While smartphone manufacturing has picked up in India over the past few years, the country is still dependent on China to a large extent for supplies of components.

According to Tarun Pathak, Associate Director, Counterpoint Research, India smartphone market will see at least 15 percent shortfall in shipments in the first quarter (January-March period).

“Whatsoever shipments were to arrive in India have come by February end but the problem will get bigger this month as Chinese manufacturing plants were almost shut last month. We are keeping a close vigil and are updating the industry situation very week,” Pathak said.

“There will be an impact to new devices to be launched in the first half which has facilities in China, as factories will not function properly. Components sourced from China will also be impacted as all factories will resume operation slowly and cautiously,” according to Peter Richardson, Research Director, Counterpoint Research.

Smartphone sales in China may also see a 30 percent drop during the lockdown period which is likely to last through the end of March.

“The negative impact from the supply chain side will last until the end of Q2 minimum,” said Richardson.

The tech industry saw this coming albeit slowly.

With new coronavirus or COVID-19 now spreading its tentacles across the world - 57 countries affected so far - tech giants have scrambled to cancel or postponed their flagship conferences one by one as large gatherings have been put on hold in some countries with several cities declaring a state of emergencies.

The bigger worry, however, is the disruption of the global supply chain that is set to impact the manufacturing — from smartphones to consumer electronics — by the middle of this month if the coronavirus cases keep swelling in numbers.

The worst is yet to come. According to Harvard Business Review (HBR), the peak of the impact of Covid-19 on global supply chains will occur in mid-March, forcing thousands of companies to throttle down or temporarily shut assembly and manufacturing plants in the US and Europe. (IANS)

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