Tech gadgets ‘could be delayed’ due to deadly outbreak

Australians could wait a lot longer to buy smartphones this year as the outbreak of deadly coronavirus hurts their production.

Smartphone shortfalls as high as 30 per cent have been predicted amid factory shutdowns in China, and analysts say the electronics industry could be even harder hit if production is down longer than two weeks.

There are also fears the virus, which has now killed 492 people and infected more than 24,000, could impact the world's biggest mobile phone conference in Barcelona this month where more than 200 Chinese companies are registered to attend.

 

A man wearing a face mask walks past an Apple store in Hong Kong. Picture: AP
A man wearing a face mask walks past an Apple store in Hong Kong. Picture: AP

 

Seven in every 10 smartphones are currently manufactured in China, including models from Apple, Huawei, Oppo, Xiaomi and ZTE, meaning efforts to contain coronavirus could have a significant impact.

Strategy Analytics predicted smartphone shipments would drop by 27 million handsets - just over 30 per cent - in the first three months of the year compared to 2019.

Executive director Neil Mawston said the shortage would mean consumers had rely on brands' product stockpile and, depending on the severity of the outbreak, could seriously dent the number of phones and computers sold this year.

"Hopefully, the new coronavirus will be contained quickly, patients will recover strongly, and gadget sales will not be impacted in any significant way," he said.

"But in a worst-case epidemic scenario, where the virus spreads out of control for weeks or months, we think demand or supply of smartphones, laptops, TVs, in Asia or worldwide could be reduced by between one and five per cent in 2020."

 

Shoppers could face long delays for the latest tech gadgets due to coronavirus. Picture: AP Photo/Vincent Yu
Shoppers could face long delays for the latest tech gadgets due to coronavirus. Picture: AP Photo/Vincent Yu

 

Gartner semiconductors and electronics senior director Bill Ray said shoppers should brace for smartphone shortages to grow worse over the next two months at least.

"The disruption in manufacturing and supply chain, caused by measures intended to reduce the rate of infection, is already having an impact on some companies and this will grow as inventories diminish," he said.

The future of two memory chip factories in the Chinese city of Wuhan, where novel coronavirus began, remained uncertain, he said, and other companies such as Apple, which relied on factories in the region, would also be affected by ongoing quarantine measures.

"Foxconn (which makes iPhones and iPads) has significant manufacturing in the region, which was enough for Apple to broaden its forecast range," Mr Ray said.

"Apple says it won't be impacted immediately, as it has inventory to maintain the supply chain, but a long-running epidemic could significantly influence supply."

Foxconn has reportedly stopped "almost all" of its Chinese production until February 10, and will rely on factories outside the country.

 

Smartphone shortages would impact international markets like Australia first. Picture: AP Photo/Ng Han Guan
Smartphone shortages would impact international markets like Australia first. Picture: AP Photo/Ng Han Guan

 

Gartner vice-president analyst Annette Zimmerman warned smartphone shortages would impact "international" markets like Australia first, though sales within China could drop as much as 15 per cent.

Telsyte managing director Foad Fadaghi said the full impact of shutting down China's factories may not be known for months as no one could accurately predict when the virus would be contained.

"No one really knows how long this will go on for, how big this issue will get," he said. "The worst case scenario could be a lot worse than some of our lowest estimates and the best case scenario would be no impact."

Coronavirus could also impact the world's largest smartphone show, Mobile World Congress, in Barcelona on February 24.

More than 200 Chinese companies have registered to appear the event, which attracted 109,000 attendees last year, amid questions about public safety.

Organiser GSMA said it would "monitor and assess the potential impact of the coronavirus" and planned to provide "sufficient sanitising products throughout all venues" and increase cleaning in common areas.



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