Tuesday, 04 February 2020 11:00

Smartphone stocks outside China 'to take big hit due to virus'

Smartphone stocks outside China 'to take big hit due to virus' Image by Gerd Altmann from Pixabay

The outbreak of coronavirus in China's Hubei province will hit smartphone inventories in international markets significantly, an analyst from the technology research firm Gartner says.

Annette Zimmermann, VP analyst, told iTWire in response to a query that this prediction was made on the assumption that factories would stop production from 28 January to 14 February.

"At this point we can only assume that things will be under control on 14 February and production can proceed as normal then," she added.

If this was the case, then overseas sales would not be affected, Zimmermann said.

However, she painted a bleaker picture for smartphone sales within China, saying, "because of restricted mobility and high caution within China, we will see a severe drop in sales/consumption inside the country. We could see a decline of 15% of sales."

Apple, which has more than 40 stores in China and depends the country for about a fifth of its total sales, has closed mainland stores and corporate offices until 9 February.

Beijing has asked many factories to stay shut until 10 February. But Reuters reported that a number of companies had kept manufacturing going. Among them was Huawei which resumed work on Monday, this being restricted to the southern province of Guangdong.

The agency also reported that Foxconn, a major production site for Apple and other vendors, could see a big hit to production if the factory closure went for another week.

It said until now Foxconn had faced only a small impact and had been using factories from Vietnam, India and Mexico to fill the shortfall.

But despite the numbers of infections rising, some companies in Wuhan, the epicentre of the outbreak, have continued production, with one among being Yangtze Memory Technologies.

iTWire also contacted tech research firms Canalys and Counterpoint Research for their take on the impact of the virus. If they do reply, their responses will be added here.


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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.



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