The coronavirus has been greatly affecting all areas of global society, the tech sector included. Some of the world’s biggest companies have closed stores, offices, and factories in China, with their employees being restricted from nonessential travel. The closure of stores throughout the country coincided with the Lunar New Year, a time when businesses close shop for everyone to observe the holidays. But then, the closures were extended until February 10. However, there are some provinces in the country that have advised companies to further delay their openings until March 1.
Many short and long-term effects are expected, from events being postponed to product launches not happening as scheduled. Looking deer into what’s happening, here are some of the ways that the coronavirus has been crippling global tech:
Employee travel restricted
Not just has the coronavirus stopped employees of the tech industry to cancel travel itineraries to China, Hongkong, and Macao, but travel plans to other parts of the world have also slowed down. LG, Facebook, Apple, and Amazon are just some of the companies that have stopped employees from traveling to China and telling those who are based in China to work from home instead.
The virus has already killed more than 630 people, infected 31,000, and spread to at least 25 countries, prompting many countries to warn against travel to China. But after the World Health Organization declared the outbreak a global health emergency, companies are becoming cautious of any unnecessary travel.
The manufacturing of goods in China has come to a halt following the lockdown of the Hubei province, which has Wuhan, the epicenter of the virus. The province and surrounding areas also happen to be hubs of technology manufacturing, and with factories in the area expected to be closed until the next weeks of February to early March, global supply chains will feel the squeeze.
Wuhan, the epicenter of the epidemic, is home to many electronic suppliers. Provinces like Zhejiang, Guangdong and Henan are very important for technology manufacturing and are also the most affected by the virus.
With factories in China crippled, a lot of tech accessories, particularly smartphones, headsets, and cars, among others are expected to be delayed in production. Of course, Chinese brands such as Huawei, Oppo, and Xiaomi will bear the biggest brunt.
For smartphone companies in China, the suspension of factory operations could lead to a snag in manufacturing processes and even supply shortages, according to analysts. This is especially so for companies who rely on factories and components in the province of Hubei – ground zero of the outbreak – where many cities are currently under lockdown.
Participation in events decreased
Perhaps the biggest event that has seen its attendance dwindle because of the coronavirus is the highly anticipated Mobile World Congress (MWC). Several big names, including LG, Sony, and Amazon have withdrawn their participation in the annual event. But then, beyond a lackluster MWC 2020, the lower production output of Chinese factories has many speculators seeing worse implications of the global health crisis, particularly with what was predicted as the explosion of 5G devices in the 2020 summit.
There are likely to be three times more 5G devices introduced in 2020 than in 2019. In addition, the first 5G-only wireless networks (referred to as 5G stand alone or 5GSA) will rollout, as opposed to 5G non-standalone (5GNS) which leverages the existing 4G/LTE networks. However, the coronavirus may make MWC the event that “should have been great” and the virus has greater implications for the rest of the high-tech industry.
Update: This year’s MWC has been canceled altogether.
Organizers on Wednesday officially canceled Mobile World Congress, the world’s biggest cell phone show. After weeks of major companies pulling out of the Barcelona trade show due to fears about the coronavirus (COVID-19. as the World Health Organization, aka WHO, is now calling it), GSMA, the organization in charge of the show, has decided to cancel.
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