SUMMARY
Chipmaker Qualcomm said that coronavirus is going to impact production and shipments
Xiaomi, Vivo and Sony cancelled on-ground product launch events in the past month
Chinese company OPPO expects disruption due to coronavirus to end in a week or two
In the aftermath of the coronavirus outbreak, various smartphone companies have come forward to highlight their concerns about the losses that the industry is facing right now and in the medium term. Recently, Chinese smartphone makers Xiaomi and OPPO and Qualcomm, the leading mobile chipset maker in the world, said that the coronavirus outbreak poses a potential threat to the global smartphone industry in terms of new launches, product shipments and production.
In a conference call with investors, Qualcomm chief financial officer Akash Palkhiwala said that the company expects significant uncertainty around the impact from the coronavirus on handset demand and supply chain. He also highlighted that coronavirus is also going to impact the manufacturing and sales of smartphones.
While the company is facing a stock crunch now in terms of new chipsets, it has also left options open. During the call, Qualcomm CEO Steve Mollenkopf said that if the company faces a supply chain issue or demand issue in China, then it has the ability to move to other regions to back it up. “We want to make sure that we maintain that strength across different markets,” Mollenkopf was quoted as saying by MoneyControl.
Xiaomi Cancels Launch Event
Earlier there was speculation that smartphone makers might delay the launch of new products. While companies are proceeding with launches, they are finding other ways to dodge the coronavirus impact.
For instance, Xiaomi India had scheduled a launch event for an upcoming smartphone on March 12, 2020. However, with the risk of coronavirus spreading at the event, the company called it off, and replaced it with an online launch which might not attract enough eyeballs, and hence might hamper sales as well.
Xiaomi India head Manu Kumar Jain said that due to recent reports of Covid-19 in certain parts of the country, Xiaomi has decided to not host the product launch events. “This is keeping in mind the safety of fans, media friends, employees and partners. I urge you all to stay safe,” Jain said in a Tweet.
While Xiaomi rescued itself for the launch, the company isn’t still able to meet the demand due to stock crunch. According to a Business Today report, Xiaomi is also facing an acute shortage of television sets in India.
‘Make In India’ Saves Samsung, OPPO
Similar to other smartphone brands, OPPO is also running short of devices in India because of the China factory shutdown. However, Oppo India president Elvis Zhou believes that the coronavirus disruption will end in a week or two.
While most companies are dependent on China-based manufacturers for parts and components required for assembly, OPPO is planning to start exporting products from its under-construction manufacturing facility in Noida.
Zhou told ET that the company is investing INR 3500 Cr for setting up this facility. The Noida-based manufacturing plant will help the company to ramp up the production of smartphones and IoT products.
OPPO’s parent company BBK Electronics also owns smartphone brands OnePlus, Vivo, Realme and iQoo. However, with China’s manufacturing plants on the shutdown, these brands are facing a supply shortage.
South Korea-based Samsung is breathing a sigh of relief amid the coronavirus outbreak. Samsung has recently shifted its manufacturing and assembling bases to other countries such as Vietnam and India, and hence the impact of the China shutdown hasn’t been very severe on the company.
Among all the smartphone makers, Apple is said to be affected the most from the Coronavirus outbreak. Last month, Apple had said that the sales of newer iPhone models such as iPhone 11 and iPhone 11 Pro have been hampered the most. These models are currently manufactured in Apple’s China facility.
On the other hand, the sales of iPhone XR, iPhone 8 and older models haven’t been impacted much, thanks to the company manufacturing them in India with its partners.
